REDtone 2015 Annual Report

CONTENTS 2 7NOTICE OF ANNUAL GENERAL MEETING STATEMENT ACCOMPANYING 8NOTICE OF ANNUAL GENERAL MEETING 9CORPORATE INFORMATION 10CORPORATE STRUCTURE 15BOARD OF DIRECTORS’ PROFILE CHAIRMAN and managing director’s 18  LETTER TO SHAREHOLDERS 28STATEMENT ON CORPORATE GOVERNANCE 30ADDITIONAL COMPLIANCE INFORMATION 35AUDIT COMMITTEE REPORT 37NOMINATION COMMITTEE REPORT STATEMENT ON RISK MANAGEMENT AND 40  INTERNAL CONTROL 41statement of directors’ interest 42DIRECTORS’ RESPONSIBILITY STATEMENT 50DIRECTORS’ REPORT 50STATEMENT BY DIRECTORS 51STATUTORY DECLARATION 53INDEPENDENT AUDITORS’ REPORT 55STATEMENTs of financial position STATEMENTs of PROFIT OR Loss 57  AND OTHER comprehensive income 62STATEMENTS OF CHANGES IN EQUITY 65STATEMENTS of CASH FLOWS 136NOTES TO THE FINANCIAL STATEMENTS 138LIST OF PROPERTIES 141ANALYSIS OF SHAREHOLDINGS ANALYSIS OF 2.75% 10-YEAR IRREDEEMABLE CONVERTIBLE 143  UNSECURED LOAN STOCKS 2010/2020 (ICULS) HOLDINGS ANNEXURE A PROXY FORM

REDTONE INTERNATIONAL BERHAD • annual report 2015notice of annual general meetingnOTICE IS HEREBY GIVEN THAT the Thirteenth Annual General Meeting of the Company will be held atLangkawi Room, Bukit Jalil Golf and Country Resort, Jalan 3/155B, Bukit Jalil, 57000 Kuala Lumpur on Thursday,19 November 2015 at 10.00 a.m. for the following purposes: AGENDA Please refer to Explanatory Note (a)1. To receive the Audited Financial Statements for the financial year ended 31 May 2015 of the Company and Group together with the Directors’ and Auditors’ Report thereon. 2. To approve the payment of a final single tier dividend of 0.2 sen per share in Resolution 1 respect of the financial year ended 31 May 2015.3. To approve the payment of Directors’ fees amounting to RM786,000 in respect Resolution 2 of the financial year ended 31 May 2015. 4. To re-elect the following Directors who retire pursuant to Article 85 of the Company’s Articles of Association:(i) Dato’ Wei Chuan Beng Resolution 3(ii) Mathew Thomas A/L Vargis Mathews Resolution 4(iii) Dato’ Mohd Zaini Bin Hassan Resolution 55. To re-elect the following Directors who retires pursuant to Article 92 of the Company’s Articles of Association:(i) Datuk Lye Ek Seang Resolution 6(ii) Loh Paik Yoong Resolution 76. To accept the retirement of Messrs Crowe Horwath as Auditors of the Company Resolution 8 and to appoint Messrs Ernst & Young as new Auditors of the Company and to authorise the Directors to fix their remuneration. A copy of the Retirement Letter from Messrs Crowe Horwath is annexed as “Annexure A” in the Annual Report 2015 has been received by the Company and the proposed Ordinary Resolution is as follows: “THAT Messrs Ernst & Young be and are hereby appointed as Auditors of the Company and to hold office until the conclusion of the 2016 Annual General Meeting, in place of the retiring Auditors, Messrs Crowe Horwath who have indicated their intention not to seek re-appointment and that authority be and is hereby given for the Directors to determine their remuneration.” 2

REDTONE INTERNATIONAL BERHAD • annual report 2015 Notice of Annual General MeetingAS SPECIAL BUSINESS: Resolution 9 Resolution 10To consider and if thought fit, to pass the following resolutions with or withoutmodifications: Resolution 117. Ordinary Resolution Retention of Mathew Thomas A/L Vargis Mathews as Independent Non- Executive Director in accordance to Recommendation 3.3 of the Malaysian Code on Corporate Governance 2012 “THAT Mathew Thomas A/L Vargis Mathews who has served the Board as Independent Non-Executive Director of the Company for a cumulative term of more than nine (9) years be and is hereby retained as an Independent Non- Executive Director of the Company.” 8. Ordinary Resolution Authority to Allot and Issue Shares Pursuant to Section 132D of the Companies Act, 1965 (‘‘the Act’’) “THAT subject always to the Act and the approvals of the regulatory authorities, the Directors be and are hereby empowered pursuant to Section 132D of the Act, to issue shares in the Company, at any time and upon such terms and conditions and for such purposes as the Directors may, in their absolute discretion, deem fit, provided that the aggregate number of shares issued pursuant to this resolution does not exceed 10% of the nominal value of the issued and paid-up capital (excluding treasury shares) of the Company for the time being and that the Directors be and are also empowered to obtain the approval for the listing of and quotation for the additional shares so issued on the Bursa Malaysia Securities Berhad and that such authority shall continue in force until the conclusion of the next Annual General Meeting of the Company.”9. Ordinary Resolution Proposed Renewal of Authority for the Company to purchase its own shares (“Proposed Share Buy-Back”) “THAT subject to the Companies Act, 1965 (“the Act”), rules, regulations and orders made pursuant to the Act, provisions of the Company’s Memorandum and Articles of Association and Bursa Malaysia Securities Berhad (“Bursa Securities”) ACE Market Listing Requirements (“ACE Market Listing Requirements”) for the time being in force and any other relevant authorities, the Directors of the Company be hereby unconditionally and generally authorised to make purchases of ordinary shares of RM0.10 each in the Company’s issued and paid-up share capital through Bursa Securities at anytime and upon such terms and conditions and for such purposes as the Directors may, in their discretion deem fit, subject further to the following: (i) the maximum number of ordinary shares which may be purchased and/or held by the Company as treasury shares shall not exceed ten per centum (10%) of the issued and paid-up share capital of the Company for the time being (“REDtone Shares”); (ii) the maximum fund to be allocated by the Company for the purpose of purchasing the REDtone Shares shall not exceed the aggregate of the retained profits and the share premium account of the Company. As of 31 May 2015, the audited retained profit and share premium of the Company were RM2.198 million and RM69.34 million, respectively. Based on the unaudited results for the first quarter ended 31 July 2015, the retained profits of the Company as at 31 July 2015 was RM1.837 million.; 3

REDTONE INTERNATIONAL BERHAD • annual report 2015Notice of Annual General Meeting (iii) the authority conferred by this resolution shall commence immediately upon the passing of this ordinary resolution and will continue to be in force until the conclusion of the next Annual General Meeting (“AGM”) of the Company at which such resolution is passed (at which time it will lapse unless by ordinary resolution passed at that meeting, the authority is renewed, either unconditionally or subject to conditions), or unless earlier revoked or varied by ordinary resolution of the shareholders of the Company in general meeting or the expiration of the period within which the next AGM is required by law to be held, whichever occurs first. THAT in respect of each purchase of REDtone Shares, the Directors of the Company shall have the absolute discretion to decide whether such shares purchased are to be cancelled and/or retained as treasury shares for distribution of dividend to the shareholders and/or resale on the ACE Market of Bursa Securities and/or retained part as treasury shares and cancel the remainder. AND THAT the Directors of the Company be hereby authorised to take all such steps to give effect to the Proposed Share Buy-Back and to do all such acts and things as the Directors of the Company may deem fit and expedient in the best interest of the Company.” 10. To transact any other business of which due notice shall have been given in accordance with Companies Act, 1965. NOTICE OF DIVIDEND ENTITLEMENT AND PAYMENTNOTICE IS HEREBY GIVEN THAT subject to the approval of shareholders at the Thirteenth Annual General Meetingof the Company to be held on Thursday, 19 November 2015, the final single tier dividend of 0.2 sen per share inrespect of the financial year ended 31 May 2015 will be paid on 27 November 2015 to the shareholders whosenames appear in the Record of Depositors on 13 November 2015. A Depositor shall qualify for entitlement to the dividend only in respect of:(a) shares transferred into the Depositor’s Securities Account before 5.00 p.m. on 13 November 2015 in respect of ordinary transfers; and(b) shares bought on the Bursa Malaysia Securities Berhad on a cum entitlement basis according to the Rules of Bursa Malaysia Securities Berhad.BY ORDER OF THE BOARDREDTONE INTERNATIONAL BERHADYeap Kok Leong (MAICSA No. 0862549)Wong Wai Foong (MAICSA No. 7001358)Company SecretariesKuala LumpurDated: 28 October 2015 4

REDTONE INTERNATIONAL BERHAD • annual report 2015 Notice of Annual General MeetingNotes:I) A member of the Company entitled to attend and vote at the above meeting is not entitled to appoint more than two (2) proxies to attend and vote at the same meeting and the appointment shall be invalid unless he specifies the proportions of his holdings to be represented by each proxy.II) A proxy may but need not be a Member of the Company, an advocate, an approved company auditor or a person approved by the Companies Commission of Malaysia, and the provision of Section 149(1)(b) of the Companies Act, 1965 shall not apply to the Company.III) The instrument appointing a proxy shall be in writing under the hand of the appointer or of his attorney authorised in writing or, if the appointer is a corporation, either under the corporation’s common seal or under the hand of an officer or attorney duly authorised.IV) Where a member is an authorised nominee as defined under the Securities Industry (Central Depositories) Act 1991, it may appoint two (2) proxies in respect of each Securities Account it holds with ordinary shares of the Company standing to the credit of the said Securities Account.V) The instrument appointing a proxy and the power of attorney or other authority (if any), under which it is signed or a duly notarised certified copy of that power or authority, shall be deposited at the Share Registrar of the Company at Unit 32-01, Level 32, Tower A, Vertical Business Suite, Avenue 3, Bangsar South, No. 8, Jalan Kerinchi, 59200 Kuala Lumpur not less than forty-eight (48) hours before the time for holding the meeting or any adjourned meeting at which the person named in the instrument proposes to vote, and in the case of a poll, not less than forty-eight (48) hours before the time appointed for the taking of the poll, and in default, the instrument of proxy shall not be treated as valid.VI) Where a Member of the Company is an exempt authorised nominee which holds ordinary shares in the Company for multiple beneficial owners in one securities account (“omnibus account”), there is no limit to the number of proxies which the exempt authorised nominee may appoint in respect of each omnibus account it holds.VII) For the purpose of determining a member who shall be entitled to attend the Thirteenth Annual General Meeting, the Company shall be requesting Bursa Malaysia Depository Sdn Bhd, in accordance with Article 61 of the Company’s Articles of Association and Section 34(1) of the Securities Industry (Central Depositories) Act, 1991 to issue a General Meeting Record of Depositors as at 12 November 2015. Only a depositor whose name appears therein shall be entitled to attend the said meeting or appoint a proxy to attend and/or vote on his stead. 5

REDTONE INTERNATIONAL BERHAD • annual report 2015Notice of Annual General MeetingExplanatory Notes on Ordinary Business:-(a) Item 1 of the Agenda This agenda item is meant for discussion only, as the provision of Section 169(1) of the Companies Act, 1965 does not require a formal approval of the shareholders for the Audited Financial Statements. Hence, this agenda item is not put forward for voting.Explanatory Notes on Special Business:-(a) Ordinary Resolution 9 – Retention of Mathew Thomas A/L Vargis Mathews as Independent Non-Executive Director in accordance to Recommendation 3.3 of the Malaysian Code on Corporate Governance 2012 Mathew Thomas A/L Vargis Mathews has served the Board as an Independent Non-Executive Director of the Company for a cumulative term of more than nine (9) years since 15 November 2003. The Board recommends that he should be retained as an Independent Non-Executive Director due to the following reasons: (i) He is a Fellow of the Chartered Association of Certified Accountants, United Kingdom. He has 28 years of working experience in the audit and accounting practices and is currently the Managing Partner of Mathew & Partners, Chartered Accountants. (ii) He has made an annual confirmation of independence and met the criteria of an Independent Director as defined in Chapter 1 of the ACE Market Listing Requirements of Bursa Malaysia Securities Berhad. During his years of appointment, he has demonstrated his ability to provide an independent judgement and views to the proposals from Management, thereby brought an element of objectivity to the Board. (iii) He has vast experience in a diverse range of businesses and has financial expertise especially in internal audit. Besides, he was able to provide constructive opinions and exercise independent judgement and has ability to act in the best interest of the Company. (iv) He has the calibre, qualifications, experiences and personal qualities to consistently challenge Management in an effective and constructive manner.(b) Ordinary Resolution 10 – Authority to allot and issue shares pursuant to Section 132D of the Act The Ordinary Resolution 10 is a renewal of the general mandate for issuance of shares by the Company under Section 132D of the Act. The Ordinary Resolution 10, if passed, will give the Directors of the Company, from the date of the Thirteenth Annual General Meeting, authority to allot and issue ordinary shares in the Company up to an amount not exceeding in total 10% of the nominal value of the issued and paid-up share capital (excluding treasury shares) of the Company for purpose of funding current and/or future investment projects, working capital, repayment of bank borrowings, acquisitions and/or for such other purposes involving the issuance or placement of shares, as the Directors consider would be in the best interest of the Company. This authority will, unless revoked or varied by the Company in General Meeting, expire at the next AGM. Since the previous AGM, the Company has not issued any new ordinary shares pursuant to the Section 132D mandate.(c) Ordinary Resolution 11 – Proposed Share Buy-Back The Ordinary Resolution 11, if passed, will give the Directors of the Company the authority to purchase the Company’s own shares up to an amount not exceeding in total ten per cent (10%) of its issued and paid-up share capital at any point in time upon such terms and conditions as the Directors may deem fit in the interest of the Company. This authority, unless revoked or varied by the Company at a general meeting, will expire at the next AGM of the Company. Please refer to the Share Buy-Back Statement dated 28 October 2015 accompanying the Company’s Annual Report 2015, for information pertaining to Ordinary Resolution 11. 6

REDTONE INTERNATIONAL BERHAD • annual report 2015 statement accompanying notice of annual general meeting Pursuant to Rule 8.29 of the ACE Market Listing Requirements of Bursa Malaysia Securities BerhadDirector standing for electionThere is no Director standing for election at the Thirteenth Annual General Meeting of the Company. 7

REDTONE INTERNATIONAL BERHAD • annual report 2015CORPORATE INFORMATIONBOARD OF DIRECTORS HEAD OFFICEDatuk Seri Syed Ali Bin Tan Sri Syed Abbas Al Habshee Suite 22-30, 5th Floor(Chairman/Non-Independent IOI Business ParkNon-Executive Director) 47100 PuchongDato’ Wei Chuan Beng Selangor Darul Ehsan(Managing Director) Telephone no.: 03-8073 2288Lau Bik Soon Facsimile no.: 03-8073 7940(Group Chief Executive Officer) Website: www.redtone.comDato’ Ismail Bin Osman E-mail: [email protected](Senior Executive Director)Mathew Thomas A/L Vargis Mathews REGISTERED OFFICE(Senior Independent Non-Executive Director)Jagdish Singh Dhaliwal Unit 30-01, Level 30, Tower A(Independent Non-Executive Director) Vertical Business SuiteDato’ Mohd Zaini Bin Hassan Avenue 3, Bangsar South(Independent Non-Executive Director) No. 8, Jalan KerinchiAvinderjit Singh A/L Harjit Singh 59200 Kuala Lumpur(Independent Non-Executive Director) Telephone no.: 03-2783 9191Datuk Lye Ek Seang Facsimile no.: 03-2783 9111(Non-Independent Non-Executive Director)Loh Paik Yoong SHARE REGISTRAR(Non-Independent Non-Executive Director) Tricor Investor Services Sdn BhdAUDIT COMMITTEE Unit 32-01, Level 32, Tower A Vertical Business SuiteMathew Thomas A/L Vargis Mathews Avenue 3, Bangsar South(Chairman/Senior Independent No. 8, Jalan KerinchiNon-Executive Director) 59200 Kuala LumpurJagdish Singh Dhaliwal Telephone no.: 03- 2783 9299(Member/Independent Non-Executive Director) Facsimile no.: 03- 2783 9222Dato’ Mohd Zaini Bin Hassan(Member/Independent Non-Executive Director) PRINCIPAL BANKERSNOMINATION COMMITTEE HSBC Bank Malaysia BerhadMathew Thomas A/L Vargis Mathews AUDITORS(Chairman/Senior Independent Crowe Horwath (AF1018)Non-Executive Director) Chartered AccountantsJagdish Singh Dhaliwal(Member/Independent Non-Executive Director) STOCK EXCHANGE LISTINGDato’ Mohd Zaini Bin Hassan(Member/Independent Non-Executive Director)REMUNERATION COMMITTEE ACE Market of the Bursa Malaysia Securities Bhd Stock Name: REDTONEJagdish Singh Dhaliwal Stock Code: 0032(Chairman/Independent Non-Executive Director)Dato’ Wei Chuan Beng COMPANY SECRETARIES(Member/Managing Director)Mathew Thomas A/L Vargis Mathews Yeap Kok Leong (MAICSA No. 0862549)(Member/Senior Independent Wong Wai Foong (MAICSA No. 7001358)Non-Executive Director) 8

REDTONE INTERNATIONAL BERHAD • annual report 2015 corporate structureREDTONE INTERNATIONAL BERHAD100% REDtone Telecommunications Sdn Bhd REDtone Technology 100% Pte Ltd100% REDtone 60% REDtone Technology Mytel Sdn Bhd Sdn Bhd 100% Meridianotch 51% SEA Telco Sdn Bhd Engineering REDtone Services Sdn Bhd Marketing100% Sdn Bhd 29%49% REDtone Network Sdn Bhd92.31% REDtone 100% RT Asia Inc. Communications Ltd 100% REDtone 100% REDtone Telecommunications Telecommunications (China) Ltd (Shanghai) Ltd56% REDtone MEX Sdn Bhd70% REDtone Data Centre Sdn Bhd90% REDtone IOT Sdn Bhd 9

REDTONE INTERNATIONAL BERHAD • annual report 2015board of directors’ profile DATUK SERI SYED ALI Bin TAN SRI SYED ABBAS AL HABSHEE (Chairman/Non-Independent Non-Executive Director) Datuk Seri Syed Ali Bin Tan Sri Syed Abbas Al Habshee, aged 53, a Malaysian, was appointed to the Board of Directors of the Company on 28 July 2011. He obtained his Professional Diploma in Leadership and Management by the New Zealand Institute of Management, New Zealand in 2003. Datuk Seri has great knowledge and executive experience in leading private, public and government controlled organisations from a broad range of industries. Datuk Seri ventured into business in the early 1980s and currently sits on the board of several private and public corporations involved in a diverse range of businesses such as Asia Media Group Berhad, UZMA Berhad and Bright Packaging Industry Berhad. He is also the Chairman of Yayasan Pendidikan Cheras, Kuala Lumpur, was appointed the Chairman of Perbadanan Nasional Berhad in June 2015, a Board of Trustees Member of Yayasan Wilayah Persekutuan and sits on the board of the Tourism Malaysia and Suruhanjaya Syarikat Malaysia. He was a member of the Malaysian Senate (Dewan Negara) from 21 April 2003 until April 2009.He attended seven out of nine Board Meetings held during the financial year ended 31 May 2015. DATO’ WEI CHUAN BENG (Managing Director) Dato’ Wei Chuan Beng, aged 49, was appointed to the Board of Directors of the Company on 15 November 2003. He is the Group Managing Director of REDtone and also manages the business in China which is operating under REDtone Asia Inc, a company listed on the US OTC Bulletin Board. He obtained his Bachelor’s Degree (Honors) in Electrical Engineering from University Technology Malaysia in 1989 and Diploma in Management (Gold Medalist Award Winner) from Malaysia Institute of Management (MIM) in 1995. He also completed an Entrepreneur Development Program from the renowned MIT Sloan School of Management in USA in 2006. Dato’ Wei began his career with Hewlett Packard Sales Malaysia Sdn Bhd in 1989 as Customer Engineer responsible for information technology (IT) technical support and customer relations before taking up a role as Major Account Manager managing sales for large and strategic global customers such as Motorola, Nortel, Intel and Alcatel, among others. Having gained wide exposure in the IT, electronics and telecommunications industries, he focused his attention to become anentrepreneur. He started REDtone Telecommunications Sdn Bhd in 1996 with two partners.As one of the founding members of the REDtone Group, Dato’ Wei is instrumental in shaping the Group’s strategicdirections, business relations and policies to grow the business locally and internationally.Dato’ Wei is known as a passionate ICT leader among industry players. He was appointed member of the NationalIT Council chaired by Malaysia’s Prime Minister (2010-2011). He sat on the board of PIKOM’s (Association of theComputer and Multimedia Industry of Malaysia) council for 10 years and was the association’s Chairman from2010-2011. Dato’ Wei is currently an advisor for PIKOM. He is also a past Chapter Chair of YPO Malaysia (YoungPresidents’ Organisation, a global organisation for CEOs with about 20,000 members in 120 countries) and hastaken a role in the South East Asia based YPO SEA Dragon Chapter. Dato’ Wei was a Youth Service Director ofthe Royal Kuala Lumpur Rotary Club. He is a master trainer for professional selling skills in REDtone Academy andalso a regular speaker at industry conferences and institutions of higher learning.Dato’ Wei is also a member of the Remuneration Committee of the Company.He attended all nine Board Meetings held during the financial year ended 31 May 2015.Dato’ Wei holds 24,390,000 ordinary shares of RM0.10 each in REDtone as at 30 September 2015. 10

REDTONE INTERNATIONAL BERHAD • annual report 2015 Board of Directors’ Profile LAU BIK SOON (Group Chief Executive Officer) Mr. Lau Bik Soon, aged 44, a Malaysian, was appointed to the Board of Directors of the Company on 13 August 2008. He assumed the position of REDtone’s Group Chief Executive Officer on 8 July 2011. Having guided the company to achieve a firm footing in the data and broadband space, Mr. Lau will continue to play a significant role in driving REDtone as it expands its spectrum of services. He was awarded the 2014 Asia Pacific Entrepreneurship Awards, a regional award for outstanding entrepreneurship. Mr. Lau has a First Class Honours Degree in Electrical Engineering from University Technology Malaysia. His extensive experience in the ICT and telecommunications industry spans over 20 years during which he held key positions with international organisations such as Cisco Systems, Sun Microsystems, Compaq Computer, TQC Consultant (IT Division) Sdn Bhd and Motorola. He won numerous sales managementexcellence awards and accolades during his time there. Prior to joining REDtone, he was the Country Manager forHitachi Data Systems Malaysia.He attended all nine Board Meetings held during the financial year ended 31 May 2015.Mr Lau holds 3,710,360 ordinary shares of RM0.10 each in REDtone as at 30 September 2015. DATO’ ISMAIL Bin OSMAN (Senior Executive Director) Dato’ Ismail Bin Osman, aged 65, a Malaysian, was appointed to the Board of Directors of the Company on 5 September 2011. He obtained his Master of Science in Microwave Semiconductor Electronics from the University of Kent, United Kingdom. Dato’ Ismail Bin Osman began his career in the telecommunications industry when he joined the Jabatan Telekom Malaysia (then known as JT) in 1976 after graduating in 1975 from UiTM. He then moved to the newly established telecommunications regulatory department called Jabatan Telekomunikasi Malaysia (JTM) in January, 1987 when JT migrated from government department to a corporation (called then STMB, now TM) established under the Companies Act, 1965. He held the position of Director of Spectrum Management in JTM until 1994 when he was promoted to Deputy Director General. In January 1999, he was promoted to the Director General of Telecommunications. Due to changes of regulatory regime from the Telecommunications Act,1950 to the Communication Multimedia Act, 1998, JTM ceased its functions and regulatory functions were handedover to the Communications and Multimedia Commission from April 1999. He retired as the last Director Generalof Telecommunications on 1 April 1999.Since his retirement from the government service, he has been actively involved directly in the private sectorinvolving telecommunications industry in particular and others in general. He sat on various boards of public andprivate companies, including Cosway Berhad, Berjaya Group Berhad, MOLACCESS Bhd and Asiaspace Sdn. Bhd.He is currently the Chairman of Malaysian Technical Standard Forum Bhd, a forum designated by MalaysianCommunications and Multimedia Commission (MCMC). He is also nominated by the Chairman of MCMC to leadthe Entry Point Project (EPP) # 9 called Smart Network.He attended seven out of nine Board Meetings held during the financial year ended 31 May 2015. 11

REDTONE INTERNATIONAL BERHAD • annual report 2015Board of Directors’ Profile MATHEW THOMAS A/L VARGIS MATHEWS (Senior Independent Non-Executive Director) Mr Mathew Thomas A/L Vargis Mathews, aged 60, a Malaysian, was appointed to the Board of Directors of the Company on 15 November 2003. He obtained his Chartered Association of Certified Accountants (UK) qualification from London in 1985. He is currently a Fellow of the Chartered Association of Certified Accountants, UK. He began his career in a small audit practice and after qualifying, joined one of the big four accounting firms in 1987. In 1990, he left to start up his own audit and accounting practice and is currently the Managing Partner of Mathew & Partners, Chartered Accountants. He is an approved Tax Agent and Company Auditor licensed by the Ministry of Finance. Currently, he sits on the boards of several private limited companies in Malaysia including Mathew & Partners Consulting Sdn Bhd, Westar Corporation Sdn Bhd and Ultimate Class Sdn Bhd. He is also a member of the Malaysian Institute of Accountants (MIA) and a Fellow of The Malaysian Institute of Taxation.Mr. Mathew Thomas is the Chairman of the Audit Committee and Nomination Committee. He is also a member ofRemuneration Committee of the Company.He attended all nine Board Meetings held during the financial year ended 31 May 2015.He holds 615,000 ordinary shares of RM0.10 each in REDtone as at 30 September 2015. JAGDISH SINGH DHALIWAL (Independent Non-Executive Director) Mr Jagdish Singh Dhaliwal, aged 63, a Malaysian, was appointed to the Board of Directors of the Company on 1 May 2010. He is a Fellow of the Association of Chartered Certified Accountants and a member of the Malaysian Institute of Accountants. He began his career as a Managing Director at Nebpalm Ltd in 1975. From 1977 to 1978, he worked in various industries till 1979 when he was appointed as an Accountant/Chief Accountant in Malaysian Rubber Research & Development Board where he served till 1996. He was Financial Controller in Multimedia Development Corporation (MDec) from 1996 to 1999 and Vice President of MDec from 1999 to 2008. Currently, he is a Director of Khalsa Coorperative Berhad. Mr. Jagdish is the Chairman of the Remuneration Committee and also a member of the Audit Committee and Nomination Committee of the Company.He attended all nine Board Meetings held during the financial year ended 31 May 2015.He holds 550,000 ordinary shares of RM0.10 each in REDtone as at 30 September 2015. 12

REDTONE INTERNATIONAL BERHAD • annual report 2015 Board of Directors’ Profile DATO’ MOHD ZAINI Bin HASSAN (Independent Non-Executive Director) Dato’ Mohd. Zaini Hassan, aged 51, a Malaysian, was appointed to the Board of Directors of the Company on 23 April 2012. He obtained his Master of Science (MSc.) in Media Management from University of Stirling, United Kingdom in 1995. He has also successfully completed his Bachelor of Mass Communication (Journalism) from Universiti Teknologi MARA (UiTM) in 1988. He began his career as a Cadet Reporter with Utusan Melayu (Malaysia) Berhad in 1989, had continuously climbed the corporate ladder, and is the Assistant Editor- in-Chief with Utusan Melayu (Malaysia) Berhad since 2008. Dato’ Mohd. Zaini is a member of the Audit Committee and Nomination Committee of the Company. He attended all nine Board Meetings held during the financial year ended 31 May 2015.He holds 20,000 ordinary shares of RM0.10 each in REDtone as at 30 September 2015. AVINDERJIT SINGH A/L HARJIT SINGH (Independent Non-Executive Director) Mr. Avinderjit Singh A/L Harjit Singh, aged 44, a Malaysian, was appointed to the Board of Directors of the Company on 19 February 2014. He completed his education in Singapore Stamford College. He has more than 20 years experience in marketing in several business areas including property development, oil & gas and auto-sports and currently sits on the board of a public company Knusford Berhad and several private limited companies, including Transwater Capital Venture Sdn Bhd, Lido Waterfront Boulevard Sdn Bhd and Berjaya Waterfront Sdn Bhd. He attended seven out of nine Board Meetings held during the financial year ended 31 May 2015. 13

REDTONE INTERNATIONAL BERHAD • annual report 2015Board of Directors’ Profile DATUK LYE EK SEANG (Non-Independent Non-Executive Director) Datuk Lye Ek Seang, aged 50, a Malaysian, was appointed to the Board of Directors of the Company on 17 December 2014. He obtained his Bachelor of Science (Hons) degree in Mathematics from the University of Malaya. Datuk Lye is the founding member of Sunzi Association of Malaysia. While in University of Malaya, he was “The Sportman of the Year” in 1998, founder and instructor of Persatuan Taekwando (WTF) University of Malaya. He joined the Rejimen Askar Wataniah (Reserved Officer Training Unit-ROTU) and was commissioned as Second Lieutenant by Duli Yang Maha Mulia Seri Paduka Baginda Yang Dipertuan Agong on 15 June 1989. He was a Non-Independent Non-Executive Director and Audit Committee Member of Magna Prima Berhad from 16 July 2007 to 24 June 2009. He was also a Non-Independent Non-Executive Director of Ho Hup Construction Company Berhad from August 2008 and re-designated as Deputy Executive Chairman from December2008 until March 2010. Currently, he is an Executive Director of Berjaya Times Square Sdn Bhd, Executive Directorof Berjaya Assets Berhad and a Director of Cardiff City Football Club.He attended three out of the four Board Meetings held during the financial year ended 31 May 2015 following hisappointment to the Board on 17 December 2014. LOH PAIK YOONG (Non-Independent Non-Executive Director) Ms Loh Paik Yoong, aged 51, a Malaysian, was appointed to the Board of Directors of the Company on 9 February 2015. She is a member of The Malaysian Institute of Certified Public Accountants and Malaysian Institute of Accountants. Having articled and worked with Messrs Peat Marwick Mitchell & Co (now known as KPMG) for 6 years to 1990, she subsequent joined the Corporate Advisory Department of Malaysian International Merchant Bankers Berhad where she was actively involved in a wide variety of corporate exercises in an advisory capacity until her departure in 1995 to join Berjaya Group Berhad (“BGroup”). Currently, she is the Head & Director in Group Investment, Berjaya Corporation Berhad, the holding company of BGroup. She also sits on the boards of several private limited companies.She attended all three Board Meetings held during the financial year ended 31 May 2015 following her appointmentto the Board on 9 February 2015.Notes:None of the directors have any family relationships with any directors and/or Substantial Shareholders; any conflictof interest with the company and any convictions for offences within the past 10 years other than traffic offences. 14

REDTONE INTERNATIONAL BERHAD • annual report 2015chairman AND managing director’s letter to shareholders“….we believe that we have set a firm foundation for a more sustainable, recurring earningsbase as we continue to leverage on our R & D expertise to sharpen our competitive edge”.Dear Shareholders,It is with a sense of deep satisfaction that we can begin this report by announcing yet another profitable year forREDtone. Our company has now recorded four consecutive years of profit in a market that is becoming increasinglycompetitive as the years advance.Our back-to-back profit record since FY’12 is the result of years of work to transform your company into an integratedtelecommunications solutions provider.Continued profitability aside, we are also proud to report the emergence of Berjaya Corporation Berhad as REDtone’sholding company and His Royal Highness, DYMM Sultan Ibrahim of Johor as our largest individual shareholder. Asone of Malaysia’s leading conglomerates, Berjaya Corporation Berhad has enormous resources that we can leverageon to support our future growth. We believe that both Berjaya Corporation Berhad and His Royal Highness willundoubtedly strengthen REDtone’s position in the telco industry.Financial HighlightsFor FY’15, REDtone’s revenue was RM150.82 million, a slight increase of 6.39% from the RM141.76 million recordedin the previous year’s restated accounts. Pre-tax profit for the year under review was RM14.62 million, up 18.18%from last year’s restated pre-tax profit of RM12.37 million. In the telco industry where market conditions remainchallenging, the company’s financial performance is commendable.The Board will be recommending a final dividend of 0.2 sen per ordinary share subject to shareholders’ approvalat the forthcoming AGM. This is after taking into consideration the capital and operational expenditure needs ofthe company in the new financial year and beyond. The recommended 0.2 sen net per share dividend translatesto 13% of the profit for the financial year ended 31 May 2015.Business ReviewIt has been 19 years since REDtone was established and 11 years since our listing. During this period we haveevolved, continuously adapting to change and competition. From being the No. 1 voicemail provider back then,then the No. 1 discounted call service provider, we are today an integrated telecommunications solutions provider.We offer our customers a comprehensive range of services in these business areas namely telecommunicationsservices, managed telecommunications network services and managed value-added services (MVAS).Our key revenue generator continues to be our voice and data services to government, enterprise and SME clients.Till today, we remain the only company in the industry to offer infrastructure integration expertise. Our technology alsoenables us to offer broadband on demand. We will continue to invest in this area of business to remain competitive,innovative and relevant to our loyal customer base.In the area of managed telecommunications network services, we are pleased to announce that we were awardeda contract to build, operate and maintain a radio access network infrastructure in the rural areas of Sarawak andJohor as part of the Malaysian Communications and Multimedia Commission’s Time 3 extension programme. Workis in progress to build the infrastructure and upon completion, REDtone will provide maintenance and operationsupport services for three years which will contribute to our revenue and profit.For MVAS, in our previous report to shareholders, we mentioned our entry into the “tele-radiology” business byestablishing a radiology centre in Petaling Jaya. With hospitals and medical centres in the country facing a severeshortage of qualified radiologists, our tele-radiology reporting service will help hospitals send X-rays and othertypes of medical imaging data to a panel of radiologists located off-site. This panel of radiologists will then analysethe images and provide their medical opinions. We expect this subscription-based service to start contributingrevenue in FY’16. 15

REDTONE INTERNATIONAL BERHAD • annual report 2015Chairman and Managing Director’s Letter to ShareholdersTo keep pace with our growing MVAS business, we now have two data centres – one located within our officepremises in Kuala Lumpur and the other in Cyberjaya. Offering ICT-As-A-Service, Business Continuity Servicesand Professional Advisory Services, these three complementing pillars work synergistically to support and assistour customers’ business needs.We have also recently ventured into Internet of Things (IoT) via our CitiSense platform and CitiAct app.As you will have noted, over the past 12 months REDtone has actively either grown or invested in MVAS. Webelieve that this is an area of business with huge potential. Our aim is to build on our strengths as well as focus ondeveloping recurring revenue streams for a stable future income.With the developments we have made and contracts we have secured over the past year, we believe that we haveset a firm foundation for a more sustainable, recurring earnings base. Some of our new businesses in managedtelecommunications network services and MVAS will bear fruit in FY’16 and further strengthen our financialperformance.We have left China for last. With the discounted call industry there facing severe challenges, we do not foresee anygrowth for the China operations.Looking AheadIn August 2015, we launched our first IoT solution, the innovative CitiSense platform and CitiAct. CitiAct is a mobileapplication that allows citizens to report and track issues concerning their community, town or city. Local councilswill be able to respond to these reports more effectively and efficiently. Applications like CitiAct are a foundation inthe development of Smart Cities and are a bridge to enable interaction between citizens and government. Needlessto say that our R&D team has lined up several more applications to support Smart City development and these willbe rolled out as a matter of course in the future. For the moment, we expect CitiAct to contribute positively to ourincome starting from FY’16.Also in the pipeline are plans to offer a range of Cloud services to our customers. This enables customers to free upor maximise their own resources. Cloud computing services range from full applications and development platformsto servers, storage, and virtual desktops.In addition, we will also actively explore opportunities of working with companies in the areas of Media and value-added ICT business locally as well as regionally so as to accelerate our growth.Looking a little farther ahead, we have identified factors, market trends or conditions that we believe will createopportunities for REDtone. These include:-• High market penetration of smart phones: As use of these devices grows rapidly, we anticipate an even greater demand for broadband connectivity. There will also be a demand for more useful and creative applications that support the IoT (Internet of Things).• The opportunity for the expansion of infrastructure in rural areas: With proven capability and expertise in being able to build, operate and maintain infrastructure in very remote areas, we are confident that we will be able to secure more business as the government expands Internet penetration to rural communities both in the Peninsula and Sabah and Sarawak.• WiFi access as a complement to fixed and mobile broadband networks: The industry no longer views WiFi as an opposing alternative to fixed and mobile access. As more people use smart devices, demand for WiFi connectivity increases. REDtone has already successfully demonstrated that we can build large scale WiFi infrastructure and is well placed to capitalise on opportunities that will result from expansion of WiFi services.• The Iskandar development: This is undoubtedly the single largest and most active development happening in the country. The scale of development of just the infrastructure alone is huge. We have upgraded our office in the southern region of the country so that we will be able to provide a full spectrum of services to both the public and private sector clients who are expected to establish themselves in the Iskandar region.• The final important factor that is expected to positively impact our business in the future is the Asean Free Trade Zone. This will give us an opportunity to enter new markets to expand our business across borders. 16

REDTONE INTERNATIONAL BERHAD • annual report 2015Chairman and Managing Director’s Letter to ShareholdersDespite a somewhat unsettled local economy, declining Ringgit and less than positive local market sentiment, weare confident that REDtone will continue to perform reasonably well in FY’16. We are here for the long term andwe remain prudent in our spending and investing. Rather than spend money on creating new infrastructure, we willlook at ways of maximising any existing available infrastructure to create and deliver solutions for our customers.We will also look at synergistic opportunities that may arise from being a subsidiary of Berjaya Corporation Berhadas well as companies related to its directors.Corporate Social ResponsibilityAs in the past years, we continued to extend a helping hand to those who need our assistance. At the height ofthe floods that hit our country in January this year, REDtone’s team in Sabah visited flood-hit areas in Mambakutwith United Pasokmomogun Kadazandusun Murut Organization (UPKO) to deliver essential supplies, part of whichwere contributed by our Sabah team.REDtone also sponsored for the third year running, the REDtone KL International Junior Open Squash Championships2014. It was the second biggest tournament in terms of the number of participating countries and players after theUS Junior Open. The event provided an excellent platform for our Malaysian national juniors to hone their skills.AppreciationThe staff, management, fellow board members and business partners have been instrumental in the continuedsuccess of the company. To all of you, we extend our sincere appreciation for a job well done and your support. Toour shareholders and customers, we say thank you for continuing to believe in us and trusting us.Datuk Seri Syed Ali Bin Tan Sri Syed Abbas Al Habshee Dato’ Wei Chuan BengNon-Independent Non-Executive Chairman Managing Director17

REDTONE INTERNATIONAL BERHAD • annual report 2015statement on corporate governanceThe Board of Directors (“Board”) of REDtone International Berhad recognises the importance of upholding goodcorporate governance in the discharge of its duties and responsibilities to uphold shareholders’ confidence andenhance shareholders’ value.The Board presents the following Statement on Corporate Governance (“Statement”) which outlines the key aspectsof how the Company has applied the Principles and Recommendations of the Malaysian Code on CorporateGovernance 2012 (“MCCG 2012”) and the governance standards prescribed in Bursa Malaysia Securities BerhadACE Market Listing Requirements, and any non-observation of the Recommendations of MCCG 2012, includingthe reasons thereof, has been included in this Statement.A. ESTABLISH CLEAR ROLES AND RESPONSIBILITIES 1. Clear Functions of the Board and Management The Board is responsible for the leadership, oversight and the long-term success of the Group. The Board fully understands their collective responsibilities in guiding the business activities of the Group in reaching an optimum balance of a sound and sustainable business operation in order to safeguard shareholders’ value. The Board has reserved certain matters for its review including the approval of Group strategic plans, financial statements, dividend policy, risk management, significant acquisitions and disposals, investments in significant joint ventures, significant property transactions, significant capital expenditure, board appointments, Board members’ fees and remuneration, etc. The Board recognises that a strong independent element of the Board is essential to ensure a balance of power and authority. The roles and responsibilities of the Chairman and Managing Director are clearly segregated to further enhance and preserve a balance of authority and accountability. The Chairman provides overall leadership to the Board, without compromising the principle of collective responsibility for Board’s decisions while the Managing Director focuses primarily on formulation and implementation of business strategies, oversees the implementation of the Board’s decision and policies, as well as supervises the day-to-day management and running of the Group. Beyond matters reserved for the Board’s decision, the Board has delegated the authority to achieving the corporate objective to the Managing Director supported by the Executive Directors and Management team. The Managing Director and Executive Directors remain accountable to the Board for the authority that is delegated to them and for the performance of the Group. The Board has also delegated certain responsibilities to other Board Committees, which operate within clearly defined terms of reference. Standing committees of the Board include the Audit Committee, Nomination Committee and Remuneration Committee. The Board receives reports at its meetings from the chairman of each committee on current activities and it is the general policy of the Company that all major decisions be considered and made by the Board as a whole. 2. Clear Roles and Responsibilities During the financial year ended 31 May 2015, the Board reviewed the sustainability, effectiveness and the implementation of the strategic plans for the year and provided guidance and input to the Management. To ensure the effective discharge of its function and duties, the principal responsibilities of the Board include the following specific areas:- • Strategic business plan and direction of the Group • Investment and divestment proposals • Approval of financial results • Risk management • Reviewing the adequacy and integrity of the Group’s internal control systems • Implementing effective public communications and investor relations policies 18

REDTONE INTERNATIONAL BERHAD • annual report 2015 Statement on Corporate GovernanceA. ESTABLISH CLEAR ROLES AND RESPONSIBILITIES (cont’d) 3. Code of Conduct The Board had formalised ethical standards through a Directors’ Code of Best Practice as contained in the Board Charter to ensure the implementation of appropriate internal systems by the Management to support, promote and ensure its compliance. The Board would also ensure that the Directors’ Code of Best Practice would be reviewed and updated regularly to meet the Company’s needs and to address the changing conditions of its business environment. The Board continues to observe high standard of ethical conducts based on the Company Directors’ Code of Ethics established by the Companies Commission of Malaysia. 4. Strategies Promoting Sustainability The Group in pursuit of sustainability and growth also recognises the impact of its strategies on the environment, social, cultural and governance aspects. The Group also promotes protection of the environment within the work environment, preventing wastages, recycling initiatives and conserving energy. The Group also had initiatives such as “Dengue Buster” run, flood relief efforts and sponsoring the KL International Junior Open Squash Championships. 5. Access to Information and Advice In ensuring the effective functioning of the Board, all Directors have individual and independent access to the advice and support services of the Company Secretary and External Auditors and, may request for information from the Management on issues under their respective purview. The Directors may also interact directly with, or request further explanation, information or updates, on any aspect of the Company’s business concerns from the Management to enable the Board to discharge its duties in relation to the matters being deliberated. The Chairman of the Audit Committee would brief the Board on any salient matters raised at the Audit Committee meetings and which require the Board’s notice or direction. Members of senior management and external advisers are invited to attend the meetings to provide additional insights and professional views on specific items on the agenda when necessary. Minutes of the Board and Board Committee meetings are circulated to Directors for their perusal prior to the confirmation of the minutes at the following Board and Board Committee meetings. The Directors may request for further clarifications or raise comments on the minutes prior to the meetings. The Directors, whether as a full board or in their individual capacity, may seek independent professional advice at the Company’s expense on specific issues and gain access to relevant information whenever required to enable the Board to discharge its duties in connection with specific matters. 6. Company Secretary The appointment and removal of the Company Secretary is a matter for the Board as a whole. All directors have access to the advice and services of the Company Secretaries, who are responsible for ensuring that board procedures are followed and that applicable rules and regulations are complied with. The existing Company Secretaries of the Company are members of Malaysian Institute of Chartered Secretaries and Administrators. The Board is satisfied with the support rendered by the Company Secretaries to the Board when discharging their roles and responsibilities. The Company Secretaries play an advisory role to the Board on the Board’s policies and procedures and compliance with the relevant regulatory requirements, codes or guidance and legislations. Also, the Company Secretaries ensure that the deliberations at the Board meetings are well captured and minuted. 19

REDTONE INTERNATIONAL BERHAD • annual report 2015Statement on Corporate GovernanceA. ESTABLISH CLEAR ROLES AND RESPONSIBILITIES (cont’d) 7. Board Charter In discharging its duties, the Board is constantly mindful of the need to safeguard the interests of the Group’s stakeholders. In order to facilitate the effective discharge of its duties and to ensure that all Board members acting on the Group’s behalf are aware of their expanding roles and responsibilities, a Board Charter has been formalised and adopted by the Board. The Board Charter clearly sets out the roles, responsibilities, authorities and operation of the Board and Board Committees. The Board Charter is made available on the Company’s website at www.redtone.com The Board will review the Board Charter from time to time to ensure that the Board Charter remains consistent with the Board’s objectives, current law and practices.B. STRENGTHEN COMPOSITION 1. Nomination Committee The Board has established the Nomination Committee comprising exclusively of three (3) Independent Non-Executive Directors. A summary of the activities of the Nomination Committee in discharging its duties during the financial year ended 31 May 2015 are set out in the Nomination Committee Statement on pages 35 to 36 of this Annual Report. The Nomination Committee is guided by a clearly defined terms of reference approved by the Board and is tasked with the following responsibilities:- (i) Consider and recommend to the Board prospective candidates for directorship, proposed by the Management, a Director or a Shareholder, taking into consideration the candidates’ skills, knowledge, expertise, experience, time commitment, character, professionalism and integrity; (ii) Recommend to the Board, the candidates to fill the seats on board committees, in consultation with the chairman of those committees. In the event that the chairman’s position (regardless of board/committees) is to be filled, the Nomination Committee will consult the Board; (iii) Recommend to the Board, eligible candidates for re-election of directors by shareholders during the annual re-election provision or retirement; (iv) Reviewing and assessing the independence of the independent directors; (v) Periodically report to the Board on succession planning personnel including the senior management. The Nomination Committee will together with the Board evaluate potential successors, taking into account the challenges and opportunities facing the Company, and the skills and expertise, including diversity needed on the Board in the future; and (vi) Annually review the required mix of skills, experience, diversity and other qualities, including core competencies and effectiveness of the Board, as a whole, the board committees and the contribution of each individual director. 20

REDTONE INTERNATIONAL BERHAD • annual report 2015 Statement on Corporate GovernanceB. STRENGTHEN COMPOSITION (cont’d)2. Develop, Maintain and Review Criteria for recruitment and Annual Assessment of Directors The Board is confident that its current size and composition is sufficient and effective in discharging the Board’s responsibilities and in meeting the Group’s current needs and requirements. The MCCG 2012 endorses a formal procedure for appointments to the Board and as such the Nomination Committee assists the Board in assessing and recommending suitable candidates of directors to fill the Board vacancies and complement the existing Board taking into consideration the required mix of skills, knowledge, expertise, experience, professionalism, integrity of the candidates, and in the case of independent non-executive directors, their abilities to discharge the responsibilities as expected from them. New nomination will be assessed and recommended to the full Board for appointment when the need arises. Directors are also advised on appointment of their legal and other obligations as a director of a listed company. They are also encouraged to attend training courses at the Company’s expense. The Nomination Committee also assists the Board in the annual assessment of Board and Board Committees. The assessment of the Board is based on specific criteria, covering areas such as the Board structure, mix of skills, Board operations, roles and responsibilities of the Board, the Board Committees and the Chairman’s role and responsibilities. For Individual Self Assessment, the assessment criteria include contribution to interaction, quality of inputs, and understanding of role.3. Remuneration Policies and Procedures The Remuneration Committee was established to assist the Board and is responsible for recommending the remuneration framework for Executive Directors. The Remuneration Committee comprises two (2) Independent Non-Executive Directors and one (1) Executive Director. The Remuneration Committee met once during the financial year under review and the attendance record is as follows: NAME OF COMMITTEE MEMBERS Designation Attendance Mr Jagdish Singh Dhaliwal Chairman 1/1 (Independent Non-Executive Director) Member 1/1 Member 1/1 Dato’ Wei Chuan Beng (Managing Director) Mr Mathew Thomas A/L Vargis Mathews (Senior Independent Non-Executive Director) The Remuneration Committee is responsible for recommending the remuneration framework for Executive Directors. In formulating the recommended framework and levels of remuneration, the Remuneration Committee ensures the remuneration policy remains supportive of the Company’s corporate objectives, is aligned with the interests of the shareholders, is designed to attract, retain and motivate the Executive Directors, and reflective of their experience and level of responsibilities. The Board, as a whole, determines the fees of Non-Executive Directors, with each Director concerned abstaining from any decision as regards his fees. Taking into account the performance of the Group and the responsibilities and performance of the Directors, Directors’ fees are set in accordance with a remuneration framework comprising responsibility fees and attendance fees. The Company pays its Directors an annual fee which is approved by its shareholders during the Annual General Meeting (“AGM”). 21

REDTONE INTERNATIONAL BERHAD • annual report 2015Statement on Corporate GovernanceB. STRENGTHEN COMPOSITION (cont’d)3. Remuneration Policies and Procedures (Cont’d) Details of the nature and amount of each major element of the remuneration and fees of directors of the Company, during the financial year, are as follows: Value of Remuneration Fees and Others Total (RM’000) (RM’000) (RM’000) Executive Directors – 1,983 1,983 Non-Executive Directors 786 72 858 The number of directors whose remuneration fell within the respective bands is as follows: Number of Number of Range of Remuneration (RM) Executive Directors Non-Executive Directors 50,000 and below – 3 50,001 to 100,000 – – 100,001 to 150,000 – 3 150,001 to 200,000 – – 200,001 to 250,000 1 – 250,001 to 300,000 – – 300,001 and above 2 1C. REINFORCE INDEPENDENCE 1. Annual Assessment of Independence The Nomination Committee had undertaken a review and assessment of the level of independence of the Independent Directors of the Board on an annual basis. The Independent Directors each completes a comprehensive checklist on their independence and upon review, the Nomination Committee and the Board are satisfied that the Independent Directors are independent of management and free from any business dealing or other relationship with the Group that could reasonably be perceived to materially interfere with their exercise of unfettered and independent judgement. 2. Tenure of Independent Directors The Company does not have term limits for Independent Directors as the Board believes there are significant advantages to be gained from the long-serving Directors who possess tremendous insight and in-depth knowledge of the Company’s business and affairs coupled with their calibre, qualifications, experience and personal qualities. Recommendation 3.2 of MCCG 2012 states that the tenure of an independent director should not exceed a cumulative term of nine (9) years. Mr Mathew Thomas A/L Vargis Mathews has served on the Board for more than nine (9) years. However, the Nomination Committee and the Board again have duly assessed, determined and resolved that Mr Mathew Thomas A/L Vargis Mathews, who had served the Board for more than nine (9) years, remains objective and independent in expressing his views and in participating in deliberation and discussion of the Board and Board Committees. The length of his service on the Board does not in any way interfere with his exercise of independent judgement and ability to act in the best interest of the Group. Mr Mathew Thomas A/L Vargis Mathews has demonstrated independence in carrying out his roles as a member of the Board and Board Committees, notably in fulfilling his role as Chairman of the Audit Committee and Nomination Committee. The Board will recommend and seek the shareholders approval at the forthcoming AGM to retain Mr Mathew Thomas A/L Vargis Mathews as an Independent Non-Executive Director of the Company in accordance with Recommendation 3.3 of MCCG 2012. 22

REDTONE INTERNATIONAL BERHAD • annual report 2015 Statement on Corporate GovernanceC. REINFORCE INDEPENDENCE (CONT’D) 3. Separation of Positions of the Chairman and Managing Director The positions of the Chairman and the Managing Director are held by two different individuals and there is a clear division of responsibilities between the Chairman and the Managing Director to ensure that there is a balance of power and authority, such that no one individual has unfettered powers of decision-making. 4. Board Composition and Balance There are currently ten (10) Directors, comprising three (3) Executive Directors, three (3) Non-Independent Non-Executive Directors and four (4) Independent Non-Executive Directors. The Board acknowledges and takes cognisance of Recommendation 3.5 of the MCCG 2012, which recommends that the Board should comprise a majority of independent directors where the chairman is not an independent director. The Chairman is a Non-Independent Non-Executive Director and he does not participate in the day- to-day management of the Group and there is no business or other relationship with the Group which could be perceived to materially interfere with his exercise of independent judgment. The Group’s Independent Non-Executive Directors remain in a position to fulfill their responsibility to provide check and balance to the Board. The Board is of the opinion that this deviation from the recommendation of the MCCG 2012 will not significantly impair the corporate governance framework of the Company, and will maintain close monitoring to ensure balance of power and authority and the Board’s decisions are made with adequate independent supervision. Also, Directors are required to abstain from deliberations and voting on decisions concerning transactions which are related to them or of which they have interests in. The profiles of the directors are set out on pages 10 to 14 of this Annual Report. The Group is an equal opportunity employer and does not practise discrimination of any form, whether based on age, gender, race or religion, throughout the organisation. Where boardroom diversity is concerned, the Board does not adopt any formal gender diversity policy in the selection of new Board candidates. The Board is cognisant of Recommendation 2.2 of the MCCG 2012 on gender diversity policies and targets and the measures taken to meet the targets. Ms Loh Paik Yoong’s appointment to the Board in 2015 is evidence that Board does not consider gender to be a bar to Board membership. The Board is satisfied with the current mix of skills, experiences, and industry-specific knowledge gained to-date by the respective Directors. The Board will continue to be mindful of the gender diversity guideline when considering future changes to the Board’s composition. The Board will, from time to time continue to review its composition and size to ensure its effectiveness in its pivotal role in the stewardship of its strategic business direction and ultimately in the enhancement of its long-term shareholder value. According to the Articles of Association (“AA”) 85 of the Company, all Directors are required to submit themselves for re-election at intervals not more than three (3) years. Article 85 of the AA provides that at every AGM of the Company, one-third (1/3) of the directors shall retire from office and shall be eligible for re-election at the same AGM. New directors appointed by the Board are subject to re-election by the shareholders at the next AGM following their appointments during the year in accordance with Article 92 of the AA of the Company. 23

REDTONE INTERNATIONAL BERHAD • annual report 2015Statement on Corporate GovernanceD. FOSTER COMMITMENT1. Time Commitment The Board requires its members to devote sufficient time to the workings of the Board, to effectively discharge their duties as Directors of the Company, and to use their best endeavours to attend meetings. Board meetings for the ensuing financial year are scheduled in advance before the end of the current financial year so that the Directors are able to plan ahead. During the financial year ended 31 May 2015, the Board met nine (9) times, deliberating upon and considering a variety of matters including the Group’s financial results, major investments, conditional take-over offer by Berjaya Corporation Berhad, strategic decisions and the overall direction of the Group. Agenda and matters for discussion are prepared and circulated in advance of each meeting. All proceedings from Board meetings are recorded and the minutes maintained by the Company Secretary. Details of the Directors’ attendance during the financial year under review are summarised below:NAME OF DIRECTORS AttendanceDatuk Seri Syed Ali Bin Tan Sri Syed Abbas Al Habshee 7/9Dato’ Wei Chuan Beng 9/9Mr Mathew Thomas A/L Vargis Mathews 9/9Mr Lau Bik Soon 9/9Dato’ Ismail Bin Osman 7/9Mr Jagdish Singh Dhaliwal 9/9Dato’ Mohd Zaini Bin Hassan 9/9Avinderjit Singh A/L Harjit Singh 7/9Datuk Lye Ek Seang (appointed on 17 December 2014) 3/4Ms Loh Paik Yoong (appointed on 9 February 2015) 3/32. Directors’ Training The Board places great emphasis on continuous education for Directors. All Directors have successfully completed the Mandatory Accreditation Programme. In addition, the Directors undergo continuous training to ensure that they are kept abreast of various issues facing the changing business environment within which the Group operates. The Nomination Committee would also assess the training needs of the Board from time to time. Some of the courses, seminars, conferences and talks attended by the Directors were in the following areas:• GST Awareness & Implications• Leadership Effectiveness Zone• 2014 Economy Update• Super Decision – Making & Execution• How Frisa Transformed its Business• The New Wave of Scalable Entrepreneurship in S.E.A• Retaining Talent to Stay Ahead of the Competition• Risk Management & Internal Control Workshop for Audit Committee• Advocacy Sessions on corporate disclosure• Global Leadership Conference• Internet & Technology Network Peer Learning Event• Panelist for Malaysia Capitalizing on E-Commerce Conference The Company Secretary circulates the relevant guidelines on statutory and regulatory requirements from time to time for the Board’s reference and briefs the Board on these updates at Board Meetings. 24

REDTONE INTERNATIONAL BERHAD • annual report 2015 Statement on Corporate GovernanceE. UPHOLD INTEGRITY IN FINANCIAL REPORTING 1. Compliance with Applicable Financial Reporting Standards The Company’s audited financial statements are prepared in accordance with the requirements of the applicable approved accounting standards in Malaysia and the provisions of the Companies Act, 1965. The Board aims to provide a balanced, clear and meaningful assessment of the Group’s financial performance and prospects at the end of the financial year, primarily through the annual financial statements, quarterly results and the Chairman and Managing Director’s Letter in the Annual Report. The Board is assisted by the Audit Committee in overseeing the Group’s financial reporting to ensure compliance, completeness, adequacy and accuracy of its financial reporting. This assessment is provided in this Annual Report through the Statement by Directors pursuant to Section 169(15) of the Companies Act, 1965 as set out on page 50 of this Annual Report. 2. Suitability and Independence of External Auditors The Group has always maintained a close and transparent relationship with its External Auditors in seeking professional advice and ensuring compliance with the relevant accounting standards whilst the Audit Committee maintains an appropriate transparent relationship with the External Auditors. The Company’s External Auditors play an essential role by enhancing the reliability of the Company’s financial statements and giving assurance of that reliability to users of these financial statements. The Audit Committee has explicit authority to communicate directly with the External Auditors. The Group External Auditors are invited to attend the Audit Committee meeting as and when necessary. The Audit Committee meets the External Auditors without the presence of the Executive Directors and Management to discuss any concerns including management’s cooperation in the audit process, quality and competency in the financial reporting function, sharing of information and audit issues in relation to appropriate accounting treatment. The terms of engagement for services provided by the External Auditors are reviewed by the Audit Committee prior to the Audit Committee’s recommendation to the Board for approval. The effectiveness, independence and performance of the External Auditors are reviewed annually by the Audit Committee. The External Auditors have direct access at all times to highlight to the Audit Committee and the Board any issues of concern, significant defects in the Company’s system of control and compliance.F. RECOGNISE AND MANAGE RISK 1. Risk Management and Internal Control The Board acknowledges its overall responsibility for continuous maintenance of a sound system of internal control. The Board has the overall responsibility in reviewing and monitoring the Group’s risk management and internal control system which provides reasonable assurance of an effective and efficient operation, compliance with laws and regulations and to safeguard shareholders’ investment and the Group’s assets. The Group is in the midst of establishing an Enterprise-Wide Risk Management System to identify, evaluate and manage significant risks that may affect the achievement of the business objectives of the Group. A Risk Management Committee will be establised to oversee the risk management system of the Group. The Board believes that this is a continuing process and more importantly a concerted effort by all employees of the Group. 25

REDTONE INTERNATIONAL BERHAD • annual report 2015Statement on Corporate GovernanceF. RECOGNISE AND MANAGE RISK (CONT’D) 2. Internal Audit Function The Company has outsourced its internal audit function to independent professional consulting firms as part of its effort to provide adequate and effective internal control system. The internal auditors report independently and directly to the Audit Committee in respect of the Internal Audit function. The Internal Audit function is carried out in accordance with the Annual Internal Audit Plan as approved by the Audit Committee and all audit findings arising therefrom are reported to the Audit Committee on a quarterly basis. The Statement on Risk Management and Internal Control furnished on pages 37 to 39 of this Annual Report provides an overview of the risk management and internal control framework within the Group during the financial year under review.G. ENSURE TIMELY AND HIGH QUALITY DISCLOSURE 1. Corporate Disclosure Policy The Board acknowledges the need to establish corporate disclosure and procedures to enable timely, comprehensive and accurate disclosures relating to the Group to the regulators, shareholders and stakeholders. The timely release of financial results, announcement of the Group’s performance on a quarterly basis and announcements on the Group’s material transactions provide the shareholders with an overview of the Group’s performance and operations. The Board is aware that information which is expected to be material must be announced in a timely fashion to Bursa Securities. The Company is committed to ensuring that communications to the public regarding the business, operations and financial performance of the Company are accurate, timely, factual, informative, consistent, broadly disseminated and where necessary, information filed with regulators is in accordance with applicable legal and regulatory requirements. 2. Leverage on Information Technology for Effective Dissemination of Information The Company maintains a website at www.redtone.com to facilitate access on pertinent information concerning the Group and its operations by the shareholders, consumers and general public. The Company’s website includes all announcements, annual reports and financial results made by the Company to Bursa Securities as well as the latest information of the Group. Through the Company’s website, the stakeholders are also able to direct queries to the Company.H. STRENGHTHEN RELATIONSHIP BETWEEN COMPANY AND SHAREHOLDERS 1. Encourage Shareholders’ Participation at General Meetings The AGM is the annual principal forum for dialogue with shareholders. Notice of the AGM and annual reports are sent out to shareholders at least twenty one (21) days before the date of the meeting together with the financial statements and agenda for meeting to enable shareholders to review the annual report, to appoint proxies and collate questions to be raised at the AGM. Each item of special business included in the Notice of AGM or EGM will be accompanied by a full explanation of the effects of a proposed resolution. 26

REDTONE INTERNATIONAL BERHAD • annual report 2015 Statement on Corporate GovernanceH. STRENGHTHEN RELATIONSHIP BETWEEN COMPANY AND SHAREHOLDERS (CONT’D) 2. Encourage Poll Voting The Board takes note of the Recommendation 8.2 of the MCCG 2012 that the Board should encourage poll voting. In line with this recommendation, the Chairman will inform the shareholders of their right to demand for a poll vote at the commencement of the general meeting. The Board will put the substantive resolutions to vote by poll as and when necessary. 3. Effective Communication and Proactive Engagement Shareholders’ meetings are important events for the Board and shareholders to meet each other. The Company values feedback from its shareholders and encourages them to actively participate in discussion and deliberations. AGM is held to consider the ordinary business of the Company and any other special businesses. The Chairman ensures sufficient time is provided to encourage the shareholders, proxies and the corporate representatives to raise any questions before each resolution is proposed. The Senior Management and External Auditors are present at the AGM to answer any query that the shareholders, proxies and corporate representatives may have. 27

REDTONE INTERNATIONAL BERHAD • annual report 2015additional compliance informationOptions, Warrants or Convertible SecuritiesDuring the financial year ended 31 May 2015, a total of 8,620,000 options were granted and 29,920,000 optionswere exercised pursuant to the Employees’ Share Option Scheme (‘‘ESOS’’). The ESOS expired on 5 June 2015due to the Conditional Take-Over Offer from Juara Sejati Sdn Bhd.During the financial year, the total number of Irredeemable Convertible Unsecured Loan Stocks (“ICULS”) convertedto ordinary shares are as follows: No. of ICULS converted 147,614,391No. of Ordinary Shares issued 59,045,756During the financial year, 155,377,551 Warrants were exercised and converted into 155,377,551 ordinary shares.The Warrants expired on 5 March 2015.Utilisation of Proceeds Raised from Corporate ProposalsThere were no corporate proposals carried out during the financial year under review.Non-Audit FeesThe amount of non-audit fees paid to the External Auditors by the Company for the financial year ended 31 May2015 was RM17,000. (2014: RM 16,000)Recurrent Related Party Transactions (“RRPT”)The details of RRPT for the financial year under review are disclosed in Note 36 of the financial statements. Theabove related party transactions are of revenue or trading in nature and are entered into in the ordinary course ofbusiness and no shareholder’s mandate was required as the amount involved is below the threshold requiring theshareholder’s approval.Share Buy-BackDuring the financial year under review, the share buy-back transactions were as follows: Average No. of REDtone purchase Total shares purchased price consideration and retained as per Share paidMonth Treasury Shares (RM) (RM)November 2014 192,500 0.73 141,255December 2014 770,800 0.71 543,805 963,300 685,060The shares purchased are held as treasury shares. As at 31 May 2015, the number of treasury shares held by theCompany is 3,597,800.Imposition of Sanctions and/or PenaltiesThere were no sanctions and/or penalties imposed on the Company and its subsidiaries, Directors or Managementby any regulatory bodies, which were material and made public during the financial year ended 31 May 2015. 28

REDTONE INTERNATIONAL BERHAD • annual report 2015 Additional Compliance InformationVariations of ResultsThere were no significant variances noted between the reported results and the unaudited results announced. TheCompany did not make any release on the profit estimates, forecasts or projections for the financial year ended31 May 2015.Profit GuaranteeThere were no profit guarantees given by the Company during the financial year ended 31 May 2015.Material Contract Involving Directors and Major ShareholdersThere were no material contracts entered into by the Group involving the interest of Directors and Major Shareholders,either still subsisting as at the end of the financial year or entered into since the end of the previous financial year.Depository Receipt ProgrammeDuring the financial year ended 31 May 2015, the Company did not sponsor any Depository Receipt Programme. 29

REDTONE INTERNATIONAL BERHAD • annual report 2015audit committee reportThe Board of Directors of REDtone International Berhad is pleased to present the Audit Committee Report for thefinancial year ended 31 May 2015.OBJECTIVEThe Audit Committee (“the Committee”) was established to act as a Committee of the Board of Directors to fulfill itsfiduciary responsibilities in accordance to the Terms of Reference of Audit Committee of REDtone International Berhad(“REDtone”) and to assist the Board to review the adequacy and integrity of the Group’s financial administrationand reporting and internal control.TERMS OF REFERENCE1.0 COMPOSITION (a) The Committee shall fulfill the following requirements: • The Committee must be composed of not less than three members; • All members of the Committee shall be non-executive directors with a majority of them being independent directors; and • At least one member of the Committee: - must be a member of the Malaysian Institute of Accountants (“MIA”); or - if he is not a member of MIA, he must have the relevant qualification and experience as specified by the ACE Market Listing Requirement of Bursa Malaysia Securities Berhad (“ACE Market Listing Requirements”). (b) Members of the Committee shall elect from among themselves a Chairman who shall be an independent non-executive director. (c) The Committee shall have the authority to: • investigate any activity of the Company and its subsidiaries. • seek any information relevant to its activities from any employee. • have full and unrestricted access to any information and documents pertaining to the Company and its subsidiaries. • convene meeting with the internal auditors and external auditors without the presence of the Executive Directors and Management staff. (d) Where the Committee is of the view that a matter reported by it to the Board has not been satisfactorily resolved resulting in a breach of the ACE Market Listing Requirements, the Committee shall promptly report such matter to Bursa Malaysia Securities Berhad (“Bursa Securities”).2.0 MEMBERSHIP The current members of the Audit Committee are as follows: Mr Mathew Thomas A/L Vargis Mathews (Chairman, Senior Independent Non-Executive Director) Mr Jagdish Singh Dhaliwal (Member, Independent Non-Executive Director) Dato’ Mohd Zaini Bin Hassan (Member, Independent Non-Executive Director) 30

REDTONE INTERNATIONAL BERHAD • annual report 2015 Audit Committee Report3.0 ATTENDANCE OF MEETINGS (a) A quorum shall consist of a majority of independent directors. In the absence of the Chairman, the members present shall elect a chairman for the meeting from amongst the members present. (b) The Committee may require the members of management, the internal auditors and representatives of the external auditors to attend any of its meetings as it determines. (c) Other Directors and employees may attend any particular meeting only at the Committee’s invitation, specific to the relevant meeting. (d) The Company Secretary shall be the Secretary of the Committee or in his absence, another person authorised by the Chairman of the Committee.4.0 FREQUENCY OF MEETINGS(a) Meetings shall be held at least four (4) times annually, or more frequently if circumstances so require the Committee to do so.(b) The Committee should meet with the External Auditors without Executive Directors present at least once a year. The details of attendance of each member at the Audit Committee meetings held during the financial year ended 31 May 2015 are as follows:NAME OF COMMITTEE MEMBERS Designation AttendanceMr Mathew Thomas A/L Vargis Mathews Chairman 5/5Mr Jagdish Singh Dhaliwal Member 5/5Dato’ Mohd Zaini Bin Hassan Member 4/55.0 AUTHORITY (a) The Committee shall have explicit authority to investigate any matter within its Terms of Reference. (b) The Committee has full access to any information pertaining to the Company and Group and unrestricted access to the Senior Management of the Company and Group. (c) The Committee has direct communication channels with the external auditor and person(s) carrying out the internal audit function or activity. (d) The Committee may with the approval of the Board, obtain independent professional or other advice in the performance of its duties. 31

REDTONE INTERNATIONAL BERHAD • annual report 2015Audit Committee Report6.0 DUTIES AND RESPONSIBILITIES The Committee shall, amongst others, perform the following functions: (a) Financial Reporting To review the quarterly results and year-end financial statements, prior to the approval by the Board of Directors, focusing particularly on: • the going concern assumption; • changes in or implementation of major accounting policy; • significant and unusual events; and • compliance with accounting standards and other legal requirements. (b) Related Party Transactions • To monitor and review any related party transaction that may arise within the Company or Group. (c) Audit Reports • To review internal and external audit reports to ensure that Management has taken adequate and appropriate remedial actions on weaknesses identified. • To discuss problems and reservations arising from the interim and final audits and any matter the auditors wish to discuss (in the absence of Management, where necessary). (d) External Audit • To consider the performance of the external auditors and make recommendations to the Board of Directors on their appointment and the external auditors’ audit fee. • To review the external auditors’ audit plan, nature and scope of audit. (e) Internal Audit • To review the adequacy of the scope, functions, competency and resources of the internal audit function and that it has the necessary authority to carry out its work. • To review the internal audit plan, processes, the results of the internal audit program, processes or investigation undertaken and whether or not appropriate action is taken on the recommendations of the internal audit function. • To approve the appointment of the Internal Auditor. (f) Other Matters • T o carry out such other function as may be agreed to by the Audit Committee and the Board of Directors. 32

REDTONE INTERNATIONAL BERHAD • annual report 2015 Audit Committee Report7.0 SUMMARY OF ACTIVITIES OF THE AUDIT COMMITTEE DURING THE FINANCIAL YEAR UNDER REVIEW 1. Reviewed the unaudited quarterly financial results of the Group before recommending of the same for the Board’s approval and release to Bursa Securities. 2. Reviewed the annual audited financial statements of the Group, the issues arising from the audit, their resolutions and the external audit report with the external auditors prior to submission to the Board for approval. 3. Reviewed the Audit Committee Report and Statement on Risk Management and Internal Control prior to submission of the same to the Board for consideration and inclusion in the Annual Report of the Company. 4. Reviewed the Share Buy-Back Statement in relation to Proposed Renewal of Share Buy-Back Authority. 5. Reviewed the Audit Planning Memorandum of the Group for the financial year ended 31 May 2015 prepared by the External Auditors to ensure adequate scope and comprehensive coverage over the activities of the Group. 6. Reviewed the performance of the external auditors and make recommendations to the Board on their re-appointment and remuneration. 7. Reviewed the annual internal audit plan to ensure adequate scope coverage over the activities of the Group. 8. Reviewed the internal audit findings and recommendations presented on the state of internal control of the Group. 9. Reported to the Board on significant audit issues and concerns discussed during the Committee’s meetings which have significant impact on the Group, for consideration and deliberation by the Board. 10. Had private sessions with the External Auditors without the presence of Executive Directors and Management. 11. Had meetings with Management on ad-hoc basis to give guidance and to understand further on policies and accounting treatment practices. 12. Attended workshops including workshops on Risk Management & Internal Control to keep abreast of new guidance and practices.8.0 INTERNAL AUDIT FUNCTION The Committee is supported by the outsourced Internal Auditors in the discharge of its duties and responsibilities. Based on the audits, the outsourced Internal Auditors provide the Committee with independent and objective reports on the state of internal control of the various operating units within the Group and the extent of compliance of the units with the Group’s established policies and procedures. The functions of the outsourced Internal Auditors are to: 1. Perform audit work in accordance with the pre-approved internal audit plan, which covered reviews of the internal control system, risk management and follow up audits to address observations reported in preceding internal audit visits; 2. Carry out reviews on the systems of internal control of the Group; 3. Review and comment on the effectiveness and adequacy of the existing internal control policies and procedures; and 4. Provide recommendations, if any, for the improvement of the internal control policies and procedures. 33

REDTONE INTERNATIONAL BERHAD • annual report 2015Audit Committee Report8.0 INTERNAL AUDIT FUNCTION (CONT’D) The Committee and Board are satisfied with the performance of the outsourced Internal Auditors and have in the interest of greater independence and continuity in the internal audit function, taken the decision to continue with the outsource of the Internal Audit function. In compliance with the decision of the Committee in the financial year under review, the operational compliance reviews were as follows: • Loans, Borrowings, Contingencies and Material Litigation • Purchase and Expense Management • Occupational Health and Safety Management • Procurement and Payment Processing • Inventory Management • Credit Control and Collection • Sales and Marketing The Audit Committee reviews the internal audit reports, its recommendations and its subsequent review to determine management compliance to the same, where applicable. The fees incurred during the financial year ended 31 May 2015 in relation to the internal audit function for the Group was RM120,000.9.0 STATEMENT ON SHARE ISSUANCE SCHEME BY THE COMMITTEE The By-Laws governing the Company’s Employee Share Option Scheme (“ESOS”) was approved on 30 November 2010 for a duration of five (5) years commencing 14 January 2011. The Committee confirms that the allocation of options offered by the Company to the eligible employees of the Group complies with the By-Laws of the Company’s ESOS. On 27 March 2015, REDtone received a notice of conditional take-over offer from RHB Investment Bank Berhad on behalf of Juara Sejati Sdn Bhd (“JSSB”), a wholly-owned subsidiary of Berjaya Corporation Berhad to acquire: i) all the remaining ordinary shares of RM0.10 each in REDtone not already owned by JSSB and persons acting in concert (“PAC”) with it and such number of REDtone shares that may be issued pursuant to: a. the exercise of outstanding options granted pursuant to ESOS; and/or b. the conversion of outstanding 2.75% 10-year irredeemable convertible unsecured loan stocks 2010/2020 issued by REDtone (“REDtone ICULS”) (collectively referred to as the “Offer Shares”); and ii) all the remaining REDtone ICULS not already owned by JSSB and its PACs (“Offer ICULS”), for a cash offer price of RM0.80 per Offer Share and RM0.32 per Offer ICULS. (collectively referred to as the “Offer”)Pursuant to the ESOS’s By-Laws, the eligible employees shall be entitled to exercise all or any of their options atthe date of the Offer being declared unconditional, within such period to be determined by the Options Committeeand any unexercised options shall become null and void upon the expiry of such period. Resulting from the above,the ESOS approved on 30 November 2010 for a duration of five (5) years commencing 14 January 2011, expiredon 5 June 2015. 34

REDTONE INTERNATIONAL BERHAD • annual report 2015 NOMINATION COMMITTEE REPORTOBJECTIVEThe Nomination Committee (‘‘the Committee’’) was established to act as a Committee of the Board of Directors toassist the Board of Directors to identify, nominate and orientate new Directors.TERMS OF REFERENCE1.0 COMPOSITION (a) The Committee shall fulfill the following requirements: • The Committee must comprise not less than three members; and • All the members of the Committee shall be non-executive directors, with a majority of whom are independent non-executive directors; (b) The Chairman of the Committee shall be a Senior Independent Non-Executive Director.2.0 ATTENDANCE OF MEETINGS (a) A quorum shall consist of two or half of the committee, whichever is the higher. In the absence of the Chairman, the members present shall elect a Chairman for the meeting from amongst the members present. (b) The Committee Members may participate in a meeting by means of conference telephone, conference videophone or any similar or other communications equipment by means of which all persons participating in the meeting can hear each other. Such participation in a meeting shall constitute his/ her presence in person at such meeting. Minutes of such a meeting signed by the Chairman of the Committee shall be conclusive evidence of any resolution of any meeting conducted in the manner as aforesaid. (c) The Company Secretary shall be the Secretary of the Committee or in his/her absence, another person authorised by the Chairman of the Committee.3.0 FREQUENCY OF MEETINGS Meeting shall be held at least once a year, or more frequently if circumstances so require the Committee to do so.4.0 AUTHORITY (a) The Committee has full access to any information pertaining to the Company and Group and unrestricted access to the senior management of the Company and Group. (b) The Committee may with the approval of the Board, obtain independent professional or other advice in the performance of its duties.5.0 DUTIES AND RESPONSIBILITIES The Committee shall, amongst other, discharge the following functions: (a) Consider and recommend to the Board prospective candidates for directorship, proposed by the management, a Director or a shareholder, taking into consideration the candidates skills, knowledge, expertise, experience, time commitment, character, professionalism and integrity; (b) Recommend to the Board, the candidates to fill the seats on board committees, in consultation with the chairman of those committees. In the event that the chairman’s position (regardless of board/ committees) is to be filled, the committee will consult with the Board; 35

REDTONE INTERNATIONAL BERHAD • annual report 2015Nomination Committee Report5.0 DUTIES AND RESPONSIBILITIES (cont’d)(c) Recommend to the Board, eligible candidates for re-election of directors by shareholders during the annual re-election provision or retirement;(d) Reviewing and assessing the independence of the independent directors;(e) Periodically report to the Board on succession planning personnel including the senior management. The Nomination Committee will together with the Board evaluate potential successors, taking into account the challenges and opportunities facing the Company, and the skills and expertise, including diversity needed on the Board in the future;(f) Annually review the required mix of skills, experience, diversity and other qualities, including core competencies and effectiveness of the board, as a whole, the board committees and the contribution of each individual Director. The Nomination Committee comprises exclusively three (3) Independent Non-Executive Directors. The Nomination Committee met once during the financial year under review and the attendance record is as follows:-NAME OF COMMITTEE MEMBERS Designation AttendanceMr Mathew Thomas A/L Vargis Mathews Chairman 1/1(Senior Independent Non-Executive Director) Member 1/1 Member 1/1Mr Jagdish Singh Dhaliwal (Independent Non-Executive Director)Dato’ Mohd Zaini Bin Hassan (Independent Non-Executive Director) The Board is cognisant of the gender diversity recommendation promoted by the Malaysian Code on Corporate Governance 2012. Ms Loh Paik Yoong’s appointment to the Board is evidence that the Board does not consider gender to be a bar to Board membership. The Board is satisfied with the current mix of skills, experiences, and industry-specific knowledge gained to-date by the respective Directors. The Board will continue to be mindful of the gender diversity guideline when considering future changes to the Board’s composition. The Nomination Committee conducted an annual assessment of the Board’s effectiveness as a whole and the contribution of each individual Director and Board Committees in respect of the financial year ended 31 May 2015. The annual assessment comprises Board and Committee Assessments, Board Skills Matrix evaluation and a Self Assessment checklist of the Independent Directors using customised questionnaires which were completed by the Directors. These questionnaires are sent to respective Board Committees and Directors for their completion, in order for them to provide their feedback, views, and suggestions for improvement. The results of the assessment questionnaires are compiled by the Company Secretary and tabled to the Nomination Committee and Board for review and deliberation. The assessment of the Board is based on specific criteria, covering areas such as the Board structure, mix of skills, Board operations, roles and responsibilities of the Board, the Board Committee and the Chairman’s role and responsibilities. The Board was satisfied with the results of the assessment and the current size and composition of the Board is appropriate and well-balanced with the right mix of skills with the Board composition comprising individuals of high caliber, credibility and with the necessary skills and qualifications to enable the Board to discharge its duties and responsibilities effectively. 36

REDTONE INTERNATIONAL BERHAD • annual report 2015 statement on risk management and internal control1. INTRODUCTION The Board of Directors (“Board”) of REDtone International Berhad recognises the importance of good corporate governance practices. The Board is committed to maintaining a sound risk management and internal control system to safeguard shareholders’ investment and the Group’s assets. The Board is pleased to set out below the Board’s Statement on Risk Management and Internal Control (“Statement”) which is prepared in accordance with Rule 15.26(b) of Bursa Malaysia Securities Berhad ACE Market Listing Requirements, Malaysian Code on Corporate Governance 2012 and as guided by the Statement on Risk Management and Internal Control: Guidelines for Directors of Listed Issuers (“Guidelines”). This Statement outlines the nature and scope of risk management and internal control of the Group and there are no material associates that have not been dealt with as part of the Group in applying the Guidelines.2. BOARD RESPONSIBILITY The Board affirms its overall responsibility for the Group’s system of risk management and internal control and continuously reviews the adequacy and integrity of the system. It should also be appreciated that the whole system of internal control is designed to manage and control risks appropriately rather than a definitive system designed for the total avoidance of risks or for eliminating the risk of failure. The system of risk management and internal control covers not only financial control but also operational, commercial and compliance control. The Board believes that this is a continuing process and more importantly a concerted effort by all employees of the Group. As part of its review, the Board continues to take necessary measures to strengthen its risk management and internal control system to address any weaknesses identified. These processes are in place throughout the financial year under review and up to the date of approval of this Annual Report. The Board has delegated to the Audit Committee the responsibility to review the internal control processes and to report to the Board in the event there is any major inadequacy of the internal control systems. The Executive Committee is in the midst of establishing a Risk Management Committee to oversee the risk management system of the Group.3. RISK MANAGEMENT FRAMEWORK The Board regards the management of core risks as an integral and critical part of the day-to-day operations of the Group and it is embedded into the culture, processes and structures of the Group. The experience, knowledge and expertise to identify and manage such risks throughout the financial year under review enables the Group to make cautious, mindful and well-informed decisions through formulation and implementation of requisite action plans and monitoring regime which are imperative in ensuring the accomplishment of the Group’s objectives. Day-to-day operations in respect of financial, commercial, legal compliance and operational aspects of the Group are closely monitored by the respective Heads of Department and Project Managers. The deliberation of risks and mitigation responses are discussed at periodic management meetings. The implementation of Enterprise-Wide Risk Management Program (“ERM”) to further assist in the management of risks of the Group is in the midst of being established. The key features of ERM framework are as follows: • It outlines the ERM methodology on the identification of key business risks through a structured approach and to determine if controls are in place in mitigating the risks identified. • It establishes guidelines to enable Management to prioritise the risks and allocation of resources to manage the risks. The management of risks is an on-going process to identify, evaluate and manage the significant risks faced by the Group. Further assurance is provided by the Internal Audit function which operates across the Group with emphasis on key operating functions within the Group. The Board shall re-evaluate the existing risk management practices, and where appropriate and necessary, revise such practices accordingly. 37

REDTONE INTERNATIONAL BERHAD • annual report 2015Statement on Risk Management and Internal control4. KEY INTERNAL CONTROL ELEMENTS The key elements of the Group’s Internal Control System include: • Board Committees to assist the Board in overseeing the management of risks, each with clearly defined terms of reference, authorities and responsibilities. The standing committees include the Audit Committee, Nomination Committee and Remuneration Committee; • Well defined organisational structure with clear lines of authority, accountability and responsibilities of the Management team; • The Managing Director, Group Chief Executive Officer and Senior Management are closely involved in the running of business and operations of the Group. They report to the Board on significant changes in the business and external environment which may affect the operations of the Group at large; • The Code of Ethics and Business Conduct is a vital and integral part of the Group’s control environment; • Review of all proposals for material capital and investment opportunities by the Executive Committee and approval for the same by the Board prior to expenditure being committed; • An Authorisation Matrix which defines the delegation of authority and the approval limits; • The Audit Committee reviews the effectiveness of the Group’s system of internal control on behalf of the Board. The Audit Committee comprises of non-executive members of the Board, who are independent directors. The Audit Committee is not restricted in any way in the conduct of its duties and has unrestricted access to the internal and external auditors of the Company and to all employees of the Group. The Audit Committee is also entitled to seek such other third party independent professional advice deemed necessary in the performance of its responsibility; • Review by the Audit Committee of internal control issues identified by the external and internal auditors and action taken by Management in respect of the findings arising therefrom. The Internal Audit function reports directly to the Audit Committee. Findings are communicated to Management and the Audit Committee with recommendations for improvements and follow-up to confirm all agreed recommendations are implemented. The Internal Audit plan is structured on a risk based approach and is reviewed and approved by the Audit Committee; • The Company’s performance is monitored regularly and the business objectives and plans are reviewed in the management meetings attended by division and business unit heads. The Managing Director and Executive Directors meet regularly with Senior Management to consider the Group’s financial performance, business initiatives and other management and corporate issues; • There are sufficient reports generated in respect of the business and operating units to enable proper review of the operations and financials. Management accounts are prepared timely and on a monthly basis and is reviewed by the Managing Director, Executive Directors and Senior Management; • The professionalism and competency of staff are enhanced through a training and development program. A performance management system is in place with established key performance indicators to measure and review staff performance on an annual basis; and • The Group outsources its internal audit function to independent professional consulting firms for greater independence and accountability in the internal audit function. 38

REDTONE INTERNATIONAL BERHAD • annual report 2015 Statement on Risk Management and Internal control5. INTERNAL AUDIT FUNCTION In a desire to maintain total independence from the Management on the internal control environment and remain in compliance with the Guidelines, the Company has outsourced its internal audit function to independent professional consulting firms as part of its effort to provide adequate and effective internal control system. The internal auditors report independently and directly to the Audit Committee in respect of the internal audit function. The internal audit function is carried out in accordance with the annual internal audit plan as approved by the Audit Committee and all audit findings arising therefrom are reported to the Audit Committee on a quarterly basis. The internal auditors are allowed complete and unrestricted access to all documents and records of the Group deemed necessary in the performance of its function and independently reviews the risk identification procedures and control processes implemented by Management. It also reviews the internal controls in the key activities of the Group’s business based on the risk profiles of the business units in the Group. In addition, the internal auditors carry out periodic assignments to ensure the policies and procedures established by the Board are complied with by Management. All reports and findings arising from these reviews are discussed primarily with the respective process custodians prior to a formal report being presented to the Audit Committee. Based on the reports of the internal auditors, identified issues in internal control have been adequately addressed, and none of the weaknesses noted have resulted in any material losses, contingency and uncertainties that would require separate disclosure in this Annual Report. The internal auditors also provide improvement recommendations pertaining to the operational and financial activities for the consideration of Management and the Board to assist in the continuous development of a more efficient and comprehensive internal control environment.6. REVIEW BY EXTERNAL AUDITORS Pursuant to Rule 15.23 of Bursa Malaysia Securities Berhad ACE Market Listing Requirements, the External Auditors have reviewed the Statement for inclusion in the Annual Report for the financial year ended 31 May 2015. Their review was performed in accordance with Recommended Practice Guide 5 (Revised): Guidance for Auditors on Engagements to Report on the Statement on Risk Management and Internal Control included in the Annual Report, issued by the Malaysian Institute of Accountants. The External Auditors have reported to the Board that nothing has come to their attention that causes them to believe that this Statement is not prepared, in all material aspects, in accordance with the disclosures required by paragraphs 41 and 42 of the Statement on Risk Management and Internal Control: Guidelines for Directors of Listed Issuers to be set out, nor is factually inaccurate.7. CONCLUSION The Board has received assurance from the Managing Director and Chief Financial Officer that the Group’s risk management and internal control system is operating adequately and effectively, in all material aspects, based on the risk management and internal control system of the Group. For the year under review, the Board has reviewed the risk management and internal control system and is of the view that the system is adequate and effective and no material weakness and/or reported shortfall in the risk management practices and internal control system has resulted and/or give rise to any material loss, contingency and/or uncertainty during the financial year under review. Nevertheless, the Board also recognises the fact that the Group’s risk management and internal control system practices must continuously evolve to support the growth and dynamics of the Group as well as to meet the changing and challenging business environment. As such, the Board, in striving for continuous improvement, will put in place appropriate action plans to further enhance the system of internal controls and risk management practices. This Statement was approved by the Board on 21 September 2015. 39

REDTONE INTERNATIONAL BERHAD • annual report 2015statement of directors’ interestas at 30 September 2015 Direct No. of Shares Held %Name of Director % Indirect Datuk Seri Syed Ali Bin Tan Sri Syed Abbas Al Habshee – – – –Dato’ Wei Chuan Beng 24,390,000 3.24 – –Lau Bik Soon 3,710,360 0.49 – –Dato’ Ismail Bin Osman – – – –Mathew Thomas A/L Vargis Mathews 615,000 0.08 – –Jagdish Singh Dhaliwal 550,000 0.07 – –Dato’ Mohd Zaini Bin Hassan 20,000 # – –Avinderjit Singh a/l Harjit Singh – – – –Datuk Lye Ek Seang – – – –Loh Paik Yoong – – – – No. of Irredeemable Convertible Unsecured Loan Stocks 2010/2020 HeldName of Director Direct % Indirect %Datuk Seri Syed Ali Bin Tan Sri Syed Abbas Al Habshee – – – –Dato’ Wei Chuan Beng 283,000 0.44 – –Lau Bik Soon – – – –Dato’ Ismail Bin Osman – – – –Mathew Thomas A/L Vargis Mathews – – – –Jagdish Singh Dhaliwal – – – –Dato’ Mohd Zaini Bin Hassan – – – –Avinderjit Singh a/l Harjit Singh – – – –Datuk Lye Ek Seang – – – –Loh Paik Yoong – – – –Notes:# Less than 0% 40

REDTONE INTERNATIONAL BERHAD • annual report 2015 DIRECTORS’ RESPONSIBILITY STATEMENTThe Companies Act 1965 (“Act”) requires the Directors to present the financial statements of the Company and theGroup in accordance with the Act and approved accounting standards and that they give a true and fair view ofthe results of the business and the state of affairs of the Group and the Company at the end of the financial year.The Directors have placed reliance on the system of internal control within the Company and the Group to form abasis of reasonable grounds that the accounting systems and records maintained by the Company and the Groupprovide a true and fair view of the current state of affairs of the Company and the Group.The Directors have further responsibility of ensuring that accounting records are kept with reasonable accuracywhich enables the Company to provide a true and fair view of the financial results. In addition, the annual auditedfinancial statements have been prepared based on relevant and appropriate accounting policies and with usage ofreasonable and prudent judgment and estimates.The Directors have also a general responsibility for taking such steps as are reasonably open to them to safeguardthe assets of the Group and to prevent and detect fraud and other irregularities.In compliance with the several responsibilities of the Directors, the Directors present the financial statements of theCompany and the Group for the financial year ended 31 May 2015 as set out on pages 53 to 134 of this Annual Report. 41

REDTONE INTERNATIONAL BERHAD • annual report 2015directors’ reportThe directors hereby submit their report and the audited financial statements of the Group and of the Company forthe financial year ended 31 May 2015.PRINCIPAL ACTIVITIESThe principal activities of the Company are investment holding and the provision of management services to itssubsidiaries. The principal activities of the subsidiaries are set out in Note 6 to the financial statements. There havebeen no significant changes in the nature of these activities during the financial year.RESULTS The Group The Company RM’000 RM’000Profit after taxation for the financial year 11,300 13,664Attributable to:- Owners of the Company 11,660 13,664Non-controlling interests (360) – 11,300 13,664DIVIDENDSSince the end of the previous financial year, the Company paid a final tax-exempt dividend of 1.10 sen per ordinaryshare amounting to RM5,791,939 in respect of the financial year ended 31 May 2014.RESERVES AND PROVISIONSAll material transfers to or from reserves or provisions during the financial year are disclosed in the financialstatements.ISSUES OF SHARES AND DEBENTURESDuring the financial year:-(a) there were no changes in the authorised share capital of the Company;(b) the Company increased its issued and paid-up ordinary share capital from RM50,822,327 to RM75,256,608 by:- (i) the issuance of 59,045,756 new ordinary shares of RM0.10 each resulting from the conversion of 2.75% Irredeemable Convertible Unsecured Loan Stocks (“ICULS”) at the rate of ten RM0.10 nominal amount of ICULS into four fully paid-up ordinary shares of RM0.10 each in the Company; (ii) the issuance of 29,919,500 new ordinary shares of RM0.10 each at prices ranging from RM0.145 to RM0.652 per share pursuant to the Employees’ Share Option Scheme of the Company; and (iii) the issuance of 155,377,551 new ordinary shares of RM0.10 each resulting from the exercise of warrants at the rate of one RM0.10 nominal amount of warrants into one fully paid-up ordinary share of RM0.10 each in the Company. The entire new ordinary shares issued during the financial year rank pari passu in all respects with the existing ordinary shares of the Company; and(c) there were no debentures issued by the Company. 42

REDTONE INTERNATIONAL BERHAD • annual report 2015 Directors’ ReportTREASURY SHARESDuring the financial year, the Company repurchased a total of 963,300 of its issued ordinary shares from theopen market for RM685,060 including transaction costs. The average price paid for the shares repurchased wasapproximately RM0.71 per share. The shares purchased are held as treasury shares in accordance with Section67A of the Companies Act, 1965 and are presented as a deduction from equity.O f the total 752,566,072 (2014 - 508,223,265) issued and fully paid-up ordinary shares as at the end of the reportingperiod, 3,597,800 (2014 - 2,634,500) ordinary shares are held as treasury shares by the Company amounting toRM2,426,438 (2014 - RM1,741,378). Relevant details on the treasury shares are disclosed in Note 20 to the financialstatements.OPTIONS GRANTED OVER UNISSUED SHARESDuring the financial year, no options were granted by the Company to any person to take up any unissued sharesin the Company except for the share options granted pursuant to the Employees’ Share Option Scheme.EMPLOYEES’ SHARE OPTION SCHEMEThe Employees’ Share Option Scheme of the Company (“ESOS”) is governed by the ESOS By-Laws and wasapproved by shareholders on 30 November 2010. The ESOS is to be in force for a period of 5 years effective from14 January 2011. During the financial year, the expiry date of ESOS has been revised from 13 January 2016 to 5June 2015.The salient features, other terms of the ESOS and details of the share options granted during the financial year aredisclosed in Note 21(f) to the financial statements.During the financial year, the Company granted 8,620,000 share options under the ESOS.The option prices and the details in the movement of the options granted are as follows:- Number Of Share Options over Ordinary Shares Of RM0.10 Each Exercise At AtDate of Offer Price 1 June 2014 Granted Exercised Forfeited 31 May 2015 (‘000) (‘000) (‘000) (‘000) (‘000)4 March 2011 RM0.165 6,400 – (6,300) (100) –11 August 2011 RM0.145 3,335 – (3,280) (55) –7 June 2012 RM0.220 – – –5 July 2012 RM0.250 120 – (120) 1,29525 September 2012 RM0.300 14,050 – (12,043) (712) 821 February 2013 RM0.340 – (90) 1,00027 June 2013 RM0.610 180 – (82) –2 September 2013 RM0.550 2,350 – (1,165) (185) –22 October 2013 RM0.630 1,000 – (1,000) –9 January 2014 RM0.590 – – –18 December 2014 RM0.630 100 7,000 (100) – 2,10018 February 2015 RM0.652 100 1,620 (100) – 90 300 (300) – (4,900) – – (1,530) – – 27,935 8,620 (29,920) (2,142) 4,493 43

REDTONE INTERNATIONAL BERHAD • annual report 2015Directors’ ReportEMPLOYEES’ SHARE OPTION SCHEME (CONT’D)The Company has been granted exemption by the Companies Commission of Malaysia from having to disclose inthis report the names of holders to whom options have been granted to subscribe for less than 200,000 ordinaryshares of RM0.10 each. The names of option holders granted options to subscribe for 200,000 or more ordinaryshares of RM0.10 each during the financial year, other than the directors whose details are disclosed in the sectionon Directors’ Interests in this report, are as follows:- Exercise Granted during the financial yearName Grant Date Expiry Date Price Prabodh Kumar A/L 18 December 2014 5 June 2015 RM0.63 2,000,000  Kantilal H Sheth 18 December 2014 5 June 2015 RM0.63 2,000,000Mao Hong 18 December 2014 5 June 2015 RM0.63 Tan Kee Ann 18 December 2014 5 June 2015 RM0.63 200,000Ong Cheok Seong 18 December 2014 5 June 2015 RM0.63 200,000Ng Kok Hing 200,000Amrul Halim Gan Bin 18 December 2014 5 June 2015 RM0.63   Abdullah 200,000Mohamad Zazrian Bin 18 December 2014 5 June 2015 RM0.63   Zakaria 18 December 2014 5 June 2015 RM0.63 200,000Lee Kok Ser 18 December 2014 5 June 2015 RM0.63 200,000Monica Tan Chee Ling 18 December 2014 5 June 2015 RM0.63 200,000Cheong Jau Jiunn 18 December 2014 5 June 2015 RM0.63 200,000Kenny Foo Jin Teck 5 June 2015 RM0.652 200,000Janice Lim Joo Lin 18 February 2015 300,000BAD AND DOUBTFUL DEBTSBefore the financial statements of the Group and of the Company were made out, the directors took reasonablesteps to ascertain that action had been taken in relation to the writing off of bad debts and the making of allowancefor impairment losses on receivables, and satisfied themselves that there are no known bad debts and that adequateallowance had been made for impairment losses on receivables.At the date of this report, the directors are not aware of any circumstances that would require the writing off of baddebts, or the additional allowance for impairment losses on receivables in the financial statements of the Groupand of the Company.CURRENT ASSETSBefore the financial statements of the Group and of the Company were made out, the directors took reasonablesteps to ascertain that any current assets other than debts, which were unlikely to be realised in the ordinary courseof business, including their value as shown in the accounting records of the Group and of the Company, have beenwritten down to an amount which they might be expected so to realise.At the date of this report, the directors are not aware of any circumstances which would render the values attributedto the current assets in the financial statements of the Group and of the Company misleading.VALUATION METHODSAt the date of this report, the directors are not aware of any circumstances which have arisen which renderadherence to the existing methods of valuation of assets or liabilities of the Group and of the Company misleadingor inappropriate. 44

REDTONE INTERNATIONAL BERHAD • annual report 2015 Directors’ ReportCONTINGENT AND OTHER LIABILITIESThe contingent liability is disclosed in Note 40 to the financial statements. At the date of this report, there doesnot exist:-(i) any charge on the assets of the Group and of the Company that has arisen since the end of the financial year which secures the liabilities of any other person; or(ii) any contingent liability of the Group and of the Company which has arisen since the end of the financial year.No contingent or other liability of the Group and of the Company has become enforceable or is likely to becomeenforceable within the period of twelve months after the end of the financial year which, in the opinion of thedirectors, will or may substantially affect the ability of the Group and of the Company to meet their obligationswhen they fall due.CHANGE OF CIRCUMSTANCESAt the date of this report, the directors are not aware of any circumstances not otherwise dealt with in this report orthe financial statements of the Group and of the Company which would render any amount stated in the financialstatements misleading.ITEMS OF AN UNUSUAL NATUREThe results of the operations of the Group and of the Company during the financial year were not, in the opinion ofthe directors, substantially affected by any item, transaction or event of a material and unusual nature.There has not arisen in the interval between the end of the financial year and the date of this report any item,transaction or event of a material and unusual nature likely, in the opinion of the directors, to affect substantiallythe results of the operations of the Group and of the Company for the financial year.HOLDING COMPANIESThe immediate holding company is Berjaya Group Berhad and the ultimate holding company is Berjaya CorporationBerhad, all of which are incorporated in Malaysia.DIRECTORSThe directors who served since the date of the last report are as follows:-Datuk Seri Syed Ali Bin Tan Sri Syed Abbas Al HabsheeDato’ Wei Chuan Beng Lau Bik Soon Dato’ Ismail Bin Osman Mathew Thomas A/L Vargis Mathews Jagdish Singh Dhaliwal Dato’ Mohd Zaini Bin Hassan Avinderjit Singh A/L Harjit Singh Datuk Lye Ek Seang (Appointed on 17.12.14) Loh Paik Yoong (Appointed on 09.02.15) 45

REDTONE INTERNATIONAL BERHAD • annual report 2015Directors’ ReportDIRECTORS’ INTERESTSAccording to the register of directors’ shareholdings, the interests of directors holding office at the end of the financialyear in shares in the Company and its related corporations during the financial year are as follows:- Number Of Ordinary Shares Of RM0.10 Each At 1.6.2014/ Date Of At Appointment Bought Sold 31.5.2015The Company Direct Interests Dato’ Wei Chuan Beng 24,184,456 12,585,300 (14,269,756) 22,500,000 615,000Mathew Thomas A/L Vargis Mathews 515,000 100,000 – 3,710,360Lau Bik Soon 5,216,600 2,704,760 (4,211,000) 550,000 –Jagdish Singh Dhaliwal 500,000 50,000 – – 50,000Datuk Lye Ek Seang 29,800,000 2,481,920 (32,281,920) Dato’ Ismail Bin Osman – 500,000 (500,000) Dato’ Mohd Zaini Bin Hassan – 50,000 – Indirect InterestsDato’ Wei Chuan Beng* 4,000,000 – (4,000,000) – (219,148,847) –Datuk Seri Syed Ali Bin Tan Sri Syed   Abbas Al Habshee # 156,300,000 62,848,847 Number Of 2.75% 2010/2020 ICULS Of RM0.10 Nominal Value Each At 1.6.2014/ Date Of At Appointment Bought Converted 31.5.2015The Company Direct InterestsDato’ Wei Chuan Beng 283,000 – – 283,000Lau Bik Soon 511,900 Datuk Lye Ek Seang 579,800 – (511,900) – – (579,800) –Indirect InterestDatuk Seri Syed Ali Bin Tan Sri Syed 53,602,291 – (53,602,291) –  Abbas Al Habshee # 46

REDTONE INTERNATIONAL BERHAD • annual report 2015 Directors’ ReportDIRECTORS’ INTERESTS (CONT’D) Number Of Warrants At 1.6.2014/ Date Of At Appointment Bought Exercised 31.5.2015The CompanyDirect interestsDato’ Wei Chuan Beng – 1,136,000 (1,136,000) –Datuk Lye Ek Seang 2,250,000 – (2,250,000) –Indirect InterestDatuk Seri Syed Ali Bin Tan Sri Syed 41,407,931 – (41,407,931) –  Abbas Al Habshee # Number Of Share Options Over Ordinary Shares Of RM0.10 Each At At 1.6.2014 Granted Exercised 31.5.2015Share Options Of The CompanyDato’ Wei Chuan Beng 9,000,000 – (8,500,000) 500,000Mathew Thomas A/L Vargis Mathews 100,000 – (100,000) –Lau Bik Soon 500,000 –Dato’ Ismail Bin Osman 2,000,000 – (2,500,000) –Dato’ Mohd Zaini Bin Hassan 500,000 – (500,000) – 50,000 (50,000) Number Of Ordinary Shares Of RM1.00 Each At At 8.5.2015^ Bought Sold 31.5.2015Ultimate Holding Company,  Berjaya Corporation Berhad:- Direct InterestsLoh Paik Yoong 25 – – 25Datuk Lye Ek Seang 1,200,000 – – 1,200,000Indirect InterestDatuk Seri Syed Ali Bin Tan Sri Syed  Abbas Al Habshee # 14,680,950 – – 14,680,950 Number Of 0% ICULS 2005/2015 Of RM0.50 Nominal Value Each At At 8.5.2015^ Bought Converted 31.5.2015Ultimate Holding Company,  Berjaya Corporation Berhad:- Direct InterestLoh Paik Yoong 1,672 – – 1,672 47

REDTONE INTERNATIONAL BERHAD • annual report 2015Directors’ ReportDIRECTORS’ INTERESTS (CONT’D) Number Of Ordinary Shares Of RM0.50 Each At At 8.5.2015^ Bought Sold 31.5.2015Related Companies:-Berjaya Land Berhad Direct InterestsLoh Paik Yoong 16,400 – – 16,400 3,750,000Datuk Lye Ek Seang 3,750,000 – – Indirect InterestDatuk Seri Syed Ali Bin Tan Sri Syed 5,350,000 496,800 – 5,846,800  Abbas Al Habshee # Number Of Ordinary Shares Of RM0.10 Each At At 8.5.2015^ Bought Sold 31.5.2015Berjaya Sports Toto Berhad Direct InterestLoh Paik Yoong 36,609 – – 36,609Indirect InterestDatuk Seri Syed Ali Bin Tan Sri Syed 1,797,465 – (65,000) 1,732,465  Abbas Al Habshee # Number Of Ordinary Shares Of RM0.50 Each At At 8.5.2015^ Bought Sold 31.5.2015Berjaya Food BerhadDirect InterestDatuk Lye Ek Seang 2,142,200 – – 2,142,200Note:^ The date the Company became a subsidiary of Berjaya Corporation Berhad.# Deemed interested by virtue of his interest in Indah Pusaka Sdn Bhd via Tema Juara Sdn Bhd.* Deemed interested by virtue of 4,000,000 shares registered in the name of his spouse.The other director holding office at the end of the financial year had no interest in shares and options over sharesof the Company or its related corporations during the financial year. 48

REDTONE INTERNATIONAL BERHAD • annual report 2015 Directors’ ReportDIRECTORS’ BENEFITSSince the end of the previous financial year, no director has received or become entitled to receive any benefit(other than a benefit included in the aggregate amount of emoluments received or due and receivable by directorsas shown in the financial statements, or the fixed salary of a full-time employee of the Company) by reason of acontract made by the Company or a related corporation with the director or with a firm of which the director is amember, or with a company in which the director has a substantial financial interest.Neither during nor at the end of the financial year was the Group or the Company a party to any arrangementswhose object is to enable the directors to acquire benefits by means of the acquisition of shares in or debenturesof the Company or any other body corporate other than the share options granted to certain directors pursuant tothe ESOS of the Company.SIGNIFICANT EVENTS DURING THE REPORTING PERIODThe significant events during the financial year are disclosed in Note 42 to the financial statements.SIGNIFICANT EVENTS OCCURRING AFTER THE REPORTING PERIODThe significant events occurring after the reporting period are disclosed in Note 43 to the financial statements.AUDITORSThe auditors, Messrs. Crowe Horwath, retire at the forthcoming annual general meeting and do not wish to seekre-appointment.Signed in accordance with a resolution of the directorsdated 28 September 2015Dato’ Wei Chuan BengLau Bik Soon 49